The Financial Stability Board (FSB) has published final recommendations to regulate and supervise so-called “global stablecoin” arrangements. The recommendations aim to promote consistent and effective oversight of stablecoins across jurisdictions to mitigate financial stability risks while supporting innovation.
The FSB issued an initial set of 10 recommendations in October 2020 which were endorsed by the G20. The final recommendations incorporate feedback received from the public consultation and stakeholder outreach.
The recommendations focus on:
- Authorities’ readiness to regulate stablecoins. Regulators should have sufficient powers and resources to comprehensively regulate, supervise and oversee stablecoins.
- Comprehensive oversight based on stablecoin functions. Regulators should apply regulations based on stablecoins’ underlying activities and risks.
- Cross-border coordination and information sharing. Regulators should cooperate across borders to ensure comprehensive oversight of global stablecoins.
- Governance structures. Global stablecoin arrangements should have clear lines of responsibility and accountability.
- Risk management. Global stablecoins should manage operational, security, compliance and liquidity risks effectively.
- Data storage and access. Regulators should have timely access to relevant data about global stablecoins.
- Recovery and resolution plans. Global stablecoins should have plans for recovery from crises or orderly wind down.
- Disclosures. Global stablecoin issuers should provide transparent information to users.
- Stabilization mechanisms and prudential requirements. Global stablecoins should have an effective mechanism to stabilize their value and meet certain capital and liquidity requirements.
- Conformance with regulatory requirements. Global stablecoins should meet requirements before starting operations.
The FSB will continue to coordinate regulatory approaches for global stablecoins and review the implementation of the recommendations by the end of 2025. The recommendations build upon and complement international financial standards and sector-specific rules.