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The largest economies in the world need to close the gaps in their legal systems in order to prevent damage to financial stability from digital currencies such as Libra. This was announced on Tuesday by the Financial Stability Board (SPS), writes Reuters. The SPS was created by the G20 countries and is responsible for identifying weaknesses in global financial stability, as well as developing and applying regulatory policies.
On Tuesday, the SPS made 10 recommendations for creating a unified international approach to regulating stablecoins. According to the agency, the same requirements should apply to them as to other initiatives representing the same degree of risk, regardless of the technology used.
The rules applicable in the financial industry, relating, for example, to payments and customer verification, generally apply to stablecoins and allow solving at least part of the problems associated with them, the SPS notes. At the same time, regulation in different countries can be heterogeneous, which creates additional risks.
The SPS recommends that countries establish flexible interactions on this issue in order to eliminate the situation where issuers will change jurisdictions in their interests.
“Responsible departments, if necessary, should clarify regulatory powers and fill in potential gaps in the domestic legal system in order to adequately respond to the risks posed by global stablecoins,” the SPS noted.
Stablecoin operators should be required to effectively manage risks, ensure operational sustainability, and implement measures to combat cyber attacks, money laundering and terrorist financing.
At the same time, the regulator considers the existing stablecoins to be too small in scale to pose any risk to financial stability. However, the situation may change in the future, he adds.
