The Group of 20 Economies (G20) Financial Stability Board (FSB) issued a series of recommendations yesterday, in an attempt to promote a standard global regulatory response to stablecoins like Facebook’s proposed Libra coin. The G20 watchdog group noted that major nations will need to revise laws and regulations to ensure that digital currencies don’t undermine stability in the global financial system.
As Reuters reports, the recommendations urge G20 countries to ensure that stablecoins adhere to the same legal standards and rules that apply to businesses with similar levels of risk. According to the FSB, rules that are currently used for payments and customer checks must apply to stablecoins as well. In addition, the group urged cross-border collaboration to ensure that stablecoins face consistent standards across jurisdictions.
The recommendations include requirements that stablecoin operators properly manage risks, implement cyber security to prevent attacks, incorporate anti-money-laundering and anti-terror-financing safeguards, and work to be “operationally resilient.”
The FSB also reaffirmed that existing stablecoins do not appear to pose a risk to financial stability at this time – largely due to their small market capitalization and the fact that they’re mainly used in the cryptocurrency trading sector. The group warned that the risk could increase if stablecoins were more widely available and saw more widespread adoption.