International Standard Setters Publish Guidance on Stablecoin Regulations

The two groups recommend that stablecoins be treated the same as other assets that perform a transfer function.

AccessTimeIconJul 13, 2022 at 10:14 a.m. UTC
Updated May 11, 2023 at 5:11 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

The Bank for International Settlements’ Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) published their final guidance on regulating stablecoins Wednesday.

The guidance is a step toward implementing a “same risk, same regulation” legal framework for stablecoins, which are cryptocurrencies whose value is usually pegged to a national currency.

The CPMI is the BIS forum for international payments and settlements. IOSCO is an organization of the world’s securities regulators.

If a stablecoin performs a transfer function and regulators think it important to financial systems, it should observe the Principles for Financial Market Infrastructures (PFMI) just as a different instrument performing that function would have to, the BIS said in a statement. The principles are the international standards for financial market infrastructures. Countries would decide for themselves whether they want to put them in place, it said.

The collapse of Terra’s stablecoin UST in May stirred regulators across the world to call for further regulation. CPMI Chairman Jon Cunliffe, who is also a deputy governor of the Bank of England, encouraged regulation of the sector in a speech earlier this week.

Meanwhile, the European Systemic Risk Board, which oversees the European Union’s financial system, also said it plans to make proposals on how global standards can be set for crypto assets that could pose a threat to the financial system.

“Recent developments in the crypto asset market have again brought urgency for authorities to address the potential risks posed by crypto assets, including stablecoins more broadly,” Cunliffe said in a report.

This final guidance follows the consultation the two bodies started last October.

The CPMI and IOSCO will continue to examine stablecoin regulation and coordinate with other standard-setting bodies, they said.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Camomile Shumba

Camomile Shumba is a CoinDesk regulatory reporter based in the UK. She previously worked as an intern for Business Insider and Bloomberg News. She does not currently hold value in any digital currencies or projects.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.