The Bank for International Settlements (BIS) has released a set of recommendations aimed at regulating global stablecoins (GSCs). These recommendations come in response to the potential risks that widespread adoption of GSCs could pose to both domestic and international financial stability.

The BIS emphasizes the need for robust regulation and supervision of GSC arrangements to mitigate these risks. The recommendations urge global jurisdictions to be prepared for overseeing GSCs, with a focus on cross-border cooperation and information sharing.

BIS Recommendations for GSC Regulation

  • Emphasis on robust regulation and supervision of GSC arrangements
  • Encouragement for global jurisdictions to prepare for overseeing GSCs
  • Focus on cross-border cooperation and information sharing

The bank also advocates for the implementation of risk management frameworks that address operational resilience, cyber security, anti-money laundering measures, and compliance with relevant laws and regulations. Additionally, BIS highlights the importance of data storage, access to data, redemption rights, and prudential requirements in managing GSC risks.

While recognizing the potential of stablecoins to improve financial service efficiency, BIS also warns of the financial stability risks they may bring. It is essential for regulators and stakeholders to work together to ensure the safe and responsible development of the global stablecoin ecosystem.

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