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Financial Stability Board (FSB) to work more on stablecoin risks in emerging and developing economies
The decision was made at a meeting in Toronto of the FSB plenary, the standard-setting and consultative organization’s sole decision-making body, according to a statement on Friday. A stablecoin is a cryptocurrency whose the value is anchored to another asset, such as the dollar or gold.
The FSB was one of the main architects of global crypto policy. Last year, together with the International Monetary Fund, it developed a joint policy document on cryptocurrencies, warning against the implementation of blanket bans to mitigate risks related to the sector. During last week’s meeting, FSB members discussed areas that “deserve further attention” in the cryptocurrency sector.
“In emerging markets and developing economies (EMDEs), crypto-assets pose particular challenges for monetary policy and the management of capital flows,” the FSB said. “Members discussed the challenges posed by the relatively higher levels of adoption and risks of global stablecoin arrangements in EMDEs. The FSB will undertake further work to consider how these challenges can be addressed.”
The regulation of stablecoins has been a critical point between the major industrialized nations of the Group of 7 (G7) and the broader G20. These differences appear unresolved even after the conclusion of the G7 summit in Italy last week.