Major stablecoins must comply with the same safeguards as traditional forms of payments, global regulators said on Wednesday, tightening controls over a battered crypto sector.
Stablecoins are cryptocurrencies designed to have a stable value relative to traditional currencies, or to a commodity, to avoid the volatility that makes bitcoin and other digital tokens impractical for most commerce, Reuters reports.
IOSCO, a global body for securities regulators, and a committee at the Bank for International Settlements (BIS), a forum for central banks, said on Wednesday they had formally adopted proposals put out to public consultation last October. Read full story
The new guidance shows when existing payment sector rules should apply to large stablecoins, marking a major step forward in applying “same risk, same regulation”, they said.
“We expect the same level of robustness and strength in these aspects in systemically important stablecoin arrangements,” Ashley Alder, chair of IOSCO and CEO of Hong Kong’s securities regulator, said in a statement.
The guidance covers managing risks, governance and transparency standards.