On 24 November, a release on Mondo Visione advised that the Bank for International Settlements looks at market developments, how they might be monitored, the potential role of stablecoins and what this implies for their regulation. It says that private “stablecoins” are cryptocurrencies with values tied to fiat currencies or other assets. Stablecoins – in particular potential “global stablecoins” such as Facebook’s Libra proposal – pose a range of challenges from the standpoint of financial authorities around the world. At the same time, regulatory responses to global stablecoins should take into account the potential of other stablecoin uses, such as embedding a robust monetary instrument into digital environments, especially in the context of decentralised systems. It also says that it is an open question whether central bank digital currencies (CBDC) and other initiatives could in fact provide more effective solutions to fulfil the functions that stablecoins are meant to address.
The Working Paper is at https://www.bis.org/publ/work905.pdf
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