The BIS Report points out that without global rules governing stablecoins, there can be disparities that prevent these digital currenies from reaching their full potential.
The study surveyed eleven states and discovered a pressing need for well-defined regulations. The rigidness in rules between borders complicated the prospect of implementing stablecoins within the international financial market.
Most licensing frameworks require issuers to follow similar regulations. These include maintaining necessary reserves and implementing risk management and anti-money laundering (AML) systems.
Although there are notable distinctions, the way stablecoins are regulated can vary: Some function under banking rules, others as securities or commodities, and some may fall under the umbrella of payment system frameworks.
In simpler terms, the regulations, redemption rights, and definitions for stablecoins are uniform across all states. However, some regions focus on controlling democratic and fiat-backed stablecoins, whereas others like the UK and Japan have stricter approaches.
The BIS report points out that various factors including the design scope of all stablecoins, their potential risks, and the background of issuers lead to a vast array of stablecoin options. This complexity is one challenge they identify, which could pose complications if our financial system needs to accommodate it thoroughly.
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2024-04-11 03:48