Fifth, regulators should ensure that global stablecoin projects have an effective risk management framework, especially in reserve management, operational resilience, cyber security, AML/CFT measures, and “other appropriate” requirements. The supervisory authority shall ensure that appropriate policies are developed for the GSC project, clarifying how all functions and activities within the project are subject to risk management measures commensurate with the specific risks.
Sixth, regulators should ensure that the global stablecoin project establishes a sound system to protect, collect, store, and manage data. GSC companies should provide G20 with channels for timely and unimpeded access to all stablecoin transactions and user-related data and information. This puts forward technical requirements for GSC projects and requires the protection of user data privacy.
Seventh, regulators should ensure that GSC projects have appropriate recovery scheme and solutions. The supervisory authority shall ensure that the GSC project has developed an appropriate plan to support the orderly liquidation or reorganization under the applicable legal (or bankruptcy) framework, including the continuity or recovery of any key functions and activities within the GSC project.
Eighth, the regulatory authority should ensure that the GSC project provides users and relevant stakeholders with comprehensive and transparent information to understand its functions, stability mechanisms, governance structure, etc.
Ninth, the regulatory authority should ensure that the GSC project provides users with the enforceability of the redemption rights and the legal clarity of the redemption procedures. Regulators should ensure that the GSC project provides users with valid information about redemption of fiat currency assets, as well as any claims that users and intermediaries may make against the underlying reserve assets or against the issuer or guarantor, including enforceable information on how the creditor’s rights go bankrupt or reorganized.
Tenth, regulatory authorities should ensure that GSC projects meet all applicable regulatory requirements in specific jurisdictions before starting operations. GSC projects and activities shall meet the approval requirements (such as permits or registrations) for establishing mechanisms within their jurisdiction, otherwise the authorities shall not allow the operation of GSC projects within their jurisdiction.