<a href="https://www.cryptoknowmics.com/news/?p=41664&amp;preview=true&amp;preview_id=41664">Financial Stability Board</a>, the financial watchdog of G20 member states, has unveiled recommendations on the proper implementations of global stablecoins like <a href="https://www.cryptoknowmics.com/news/g7-leaders-oppose-facebooks-libra-launch-until-properly-regulated/">Facebook’s Libra</a>.
<h2>Stablecoins Could Pose Governance Challenge: FSB</h2>
Financial Stability Board's (FSB) recent <a href="https://www.fsb.org/wp-content/uploads/P131020-3.pdf">report</a> has revealed regulatory recommendations to G20 member states and global international players on how to embed stablecoins like Facebook’s Libra within the financial boundaries of world economies while attempting to prevent these stablecoins from "regulatory arbitrage”.

FSB also discloses that global stablecoins in general have the potential to become systemically important across jurisdictions while hindering governments across the world for its capability on investment decisions and policymaking.

“The decentralized nature of GSC arrangements could pose governance challenges; stabilization mechanisms and redemption arrangements could pose market, liquidity, and credit risks,” the report adds.

The report further divulges on the risks associated with technologies that powers stablecoins while warning that the infrastructure and technology used for recording transactions, and accessing, transferring, and exchanging coins could pose operational and cyber-security risks.

Further challenges include collecting and storing data relating to transactions of these global stablecoins.
<h2><strong>Regulation Needed Before Stablecoins Takes Full Swing</strong></h2>
FSB further highlights that challenges posed by these global stablecoins to international financial bodies are currently limited due to its relatively smaller adoptions while urging lawmakers across the world for formulating robust regulatory frameworks before global stablecoins takes on a full swing.

“Ensuring appropriate regulation, supervision, and oversight within jurisdictions and internationally will therefore be important to prevent any potential gaps and avoid regulatory arbitrage,” the report added.

Further collaborations between authorities of national supervision bodies are also recommended as potential gaps in their domestic frameworks” and “reduce opportunities for cross-sectoral and cross-border regulatory arbitrage.

Even though the report mostly highlights the risk associated with global stablecoins, it did throw some light on the various benefits such as efficiency savings in financial services and payments while the opportunity to include everyone within a global financial system.

FSB Releases Recommendations to Regulate Global Stablecoins Like Libra

Financial Stability Board (FSB) has unveiled recommendations on the proper implementations of global stablecoins such as Facebook’s Libra.

Jafrin is a cryptocurrency journalist/researcher fascinated by the world of decentralization. She is hopeful towards blockchain’s innovation and its potential to reshape the world for good. Currently, she is bringing out the best of cryptosphere via covering the latest ins and outs of the blockchain space.

FSB Releases Recommendations to Regulate Global Stablecoins Like Libra

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