BIS Committee and IOSCO publish guidance for regulating stablecoin agreements
International organizations affirm the principle of "same risk, same rules" by extending decade-old rules to new and rapidly expanding financial technologies.
New
The “same risk, same regulation” principle for crypto received further confirmation with the release of new guidelines on stablecoin (SA) arrangements on Wednesday. The guidelines, issued by the Committee on Payments and Market Infrastructures (CPMI) of the Bank for International Settlements (BIS) and the International Organization of Securities Commissions (IOSCO), apply the Principles for Financial Market Infrastructures ( PFMI) for payment, clearing and settlement systems to systemically important SAs that transfer stablecoins.
The document is intended for use by designers and operators of SAs and extends the PFMI standards to SAs without establishing new standards. He notes:
“An SA may need to make changes to its rules, procedures, governance arrangements and risk management framework taking into account the guidance in order for its practices to comply with the PFMI.”
He defines a stablecoin arrangement as “an arrangement that combines a range of functions to provide an instrument intended to be used as a means of payment and/or a store of value.” The guidance suggests considerations for determining which SAs they apply to, since only SAs that are "systemically important" are covered by them.
Related: IOSCO Says DeFi Is Moving Rapidly And 'Clones Financial Markets'
The PFMIs were created in response to the 2008 financial crisis and published in 2012. All of the standards apply to SAs under the new guidelines, although the authors have chosen to elaborate on the application of only four of the 24 key principles and considerations. governance, risk management, settlement finality and monetary settlements. They noted that a separate work will be published...
International organizations affirm the principle of "same risk, same rules" by extending decade-old rules to new and rapidly expanding financial technologies.
New
The “same risk, same regulation” principle for crypto received further confirmation with the release of new guidelines on stablecoin (SA) arrangements on Wednesday. The guidelines, issued by the Committee on Payments and Market Infrastructures (CPMI) of the Bank for International Settlements (BIS) and the International Organization of Securities Commissions (IOSCO), apply the Principles for Financial Market Infrastructures ( PFMI) for payment, clearing and settlement systems to systemically important SAs that transfer stablecoins.
The document is intended for use by designers and operators of SAs and extends the PFMI standards to SAs without establishing new standards. He notes:
“An SA may need to make changes to its rules, procedures, governance arrangements and risk management framework taking into account the guidance in order for its practices to comply with the PFMI.”
He defines a stablecoin arrangement as “an arrangement that combines a range of functions to provide an instrument intended to be used as a means of payment and/or a store of value.” The guidance suggests considerations for determining which SAs they apply to, since only SAs that are "systemically important" are covered by them.
Related: IOSCO Says DeFi Is Moving Rapidly And 'Clones Financial Markets'
The PFMIs were created in response to the 2008 financial crisis and published in 2012. All of the standards apply to SAs under the new guidelines, although the authors have chosen to elaborate on the application of only four of the 24 key principles and considerations. governance, risk management, settlement finality and monetary settlements. They noted that a separate work will be published...
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