Earlier this year, the Financial Stability Board authored a paper on stablecoins: 'Addressing the regulatory, supervisory and oversight challenges raised by 'global stablecoin' arrangements'.
In our previous post on the topic, we covered Fnality’s aims and our general view on the recommendations. In that post we suggested that having a classification of GSCs may be both useful and necessary in that it highlights to the public, to investors and to national regulators that - when it comes to the ‘business of money’ - today‘s and tomorrow’s worlds will include offerings which are global and systemically relevant, and that those charged with oversight and ensuring financial stability have the right tools to manage the risks that accompany such offerings.
However, it was also argued that applying a one size fits all approach to an undefined, broad bucket of ‘GSCs’ will potentially introduce overly restrictive measures for some by impacting necessary innovation, and insufficient measures for others by introducing unpalatable risks. The recommendations will be beneficial, as long as it is acknowledged and understood that not every recommendation will apply to every scheme or arrangement that might be considered a GSC.
Subsequent to this, we invite you to read Part 2 of our response; our views on the specific questions asked by the FSB in their consultative document. We continue to welcome any comments that you wish to make.