The G20 is currently drafting regulations that regulate stablecoins like Facebook's Libra. In response to the call of the G20, the Financial Stability Commission (FSB) issued 10 "high-end" recommendations that could set the legal framework for stablecoins.
G20 sets international rules for stablecoins
G20 finance ministers and central bank governors will meet under Saudi Arabia's leadership on Wednesday to discuss and "take urgent actions needed to address global challenges due to COVID-19 pandemic caused ”as stated by the host country Saudi Arabia. The G20 chief financial officers' meeting in April is scheduled to be held in Washington, D.C., but due to Corona virus outbreaks worldwide, it should be held online and more frequently.
Prior to the meeting, the FSB published 10 "high-level" recommendations on Tuesday, specifically "sent to legislative authorities at the legislative level to promote consistent and stable regulation of stablecoins. around the globe. " The G20 regulatory watchdog explains:
"Recommended recommendations pay G20's call for consideration of legal issues about the deal Global stablecoins and give advice act multilateral, taking into account the prospects of emerging markets and developing economies”.
FSB is an international body that monitors and recommends the global financial system; All G20 countries have Council members. Most regulatory agencies around the world think that stablecoins can quickly achieve global scale. A prime example is Facebook's Libra project. The recommendation will be sent to G20 finance ministers and central bank governors in an online meeting on Wednesday. The FSB is calling for comments on its recommendations submitted before 15 / 7.
10 "advanced" recommendations
In an advisory paper published on Tuesday titled "Global legal and regulatory stablecoin regulatory oversight", the FSB provided G20 with a list of 10 "premium" recommendations.
The first is to ensure that the relevant authorities have the necessary powers, tools and resources to regulate and monitor global stablecoins, including their multi-functional activities, in order to "effectively enforce the law and relevant regulations ”.
Second, the FSB recommends:
“Competent authorities should apply legal requirements to the GSC agreement (Global stablecoins) based on function and risk rate ”.
Next, the FSB asked the authority to "ensure full regulation and comprehensive oversight of GSC agreements across borders as well as industries." They should cooperate and collaborate with each other, both domestically and internationally, to regulate stablecoins across borders and sectors. ”
The fourth recommendation is that the authorities have to set up a comprehensive governance framework, clearly allocating responsibility for global stablecoins. The regulatory authority must ensure an effective risk management framework for these coins, especially regarding “reserve management, operational resilience, network security protection and AML measures. / CFT, as well as the appropriate requirements. ”
"The authorities also need to ensure that global stablecoins have a" strong system to protect, collect, store and manage data "is the 6th recommendation of the FSB. They need to have an "appropriate rehabilitation and resolution plan" as the Council's 7th proposal.
Ensure that global stablecoins provide users and stakeholders with comprehensive, transparent information. Furthermore, the authorities should "provide clear legal provisions of certain stablecoins to users in terms of the nature and ability to enforce their redemption rights and redemption process when applicable."
Finally, the government needs to require stablecoins to "meet all applicable legal, supervisory requirements of a particular jurisdiction before commencing operations within that jurisdiction and to build systems and products." products can adapt to new legal requirements as needed. ”
According to NewsBitcoin
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