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CPMI and IOSCO publish final guidance for stablecoins

BIS | Jul 13, 2022

Stablecoin regulations - CPMI and IOSCO publish final guidance for stablecoins

  • CPMI and IOSCO issue final guidance on stablecoin arrangements confirming that the Principles for Financial Market Infrastructures apply to systemically important stablecoin arrangements that transfer stablecoins.
  • Guidance is a major step forward in applying "same risk, same regulation" to stablecoins, and extending the international standards for payment, clearing and settlement systems to cover systemically important stablecoin arrangements.
  • CPMI and IOSCO will continue to examine regulatory, supervisory and oversight issues associated with stablecoin arrangements and coordinate with other standard-setting bodies.

The Bank for International Settlements' Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) today published final guidance confirming that stablecoin arrangements should observe international standards for payment, clearing and settlement systems.

See:  UK Proposes Regulations That Would Recognize Stablecoins As A Form Of Payment

The final guidance, which follows October 2021's proposals for consultation, reconfirms that if a stablecoin arrangement performs a transfer function and is determined by authorities to be systemically important, the stablecoin arrangement as a whole would be expected to observe all relevant principles of the Principles for Financial Market Infrastructures (PFMI).

This guidance is a major step forward in applying "same risk, same regulation" to systemically important stablecoin arrangements that are used for payments. It is also a key contribution to the G20 cross-border payments programme and supports the work of the Financial Stability Board (FSB) in this area.

Sir Jon Cunliffe, Chair of the CPMI and Deputy Governor for Financial Stability at the Bank of England:

Recent developments in the cryptoasset market have again brought urgency for authorities to address the potential risks posed by cryptoassets, including stablecoins more broadly. The recent market disruptions, while costly for many, were not systemic events. But they underline the speed with which confidence can be eroded and how volatile cryptoassets can be. Such events could become systemic in the future, especially given the strong growth in these markets and the increasing linkages between cryptoassets and with traditional finance.

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