FSB: Address the risks caused by global stable coin projects

The global stable coin may improve the efficiency of financial service provision, but they may also put financial stability at risk. In response to the G20’s call to review global stable coin, the Financial Stability Board (FSB) provided ten “high-level” recommendations to establish a regulatory framework for stable coin.

On April 14, 2020, the Financial Stability Board issued a report Solve the Regulatory Challenges Caused by Global Stable Coin Projects, which put forward ten regulatory recommendations. The report would be presented at a video conference of the G20 finance ministers and central bank governors on April 15, 2020. The deadline for public feedback was July 15, 2020. The final recommendations would be released in October 2020, which was based on public feedback.

FSB recommends implementing regulatory supervision which is commensurate with risks, and emphasizing the flexible, efficient, inclusive and multi-sectoral cross-border cooperation, coordination and information sharing arrangements. FSB also suggests to pay attention to the development of the “global stable coin” project and the risks that it faces may change over time, which may bring challenges to the existing supervision. FSB requires to adopt the regulatory principle of “same activity, same risk and same rules”.