The Financial Stability Board (FSB), an international body that monitors and makes recommendations to the Group of 20 (G20) nations on the global financial system, released a new warning about crypto assets, but this time with greater emphasis on stable cryptocurrencies or stablecoins.
The organization believes that these types of cryptocurrencies must be “captured by strong regulations and supervision by the relevant authorities.” This, in case they are going to be adopted as a means of mass payment, since that would give them an important role in the world financial system.
If widespread use of stablecoins is achieved in the “mainstream financial system” or be used as a store of value in multiple jurisdictions, this could represent “significant risks to financial stability in the absence of proper regulation,” he explained in a releasetoday, July 11.
“This stable currency must meet high regulatory and transparency standards, maintain reserves that preserve value stability at all times, and comply with relevant international standards,” suggests the body created in 2009.
The FSB’s call is made in the framework of the recent crisis experienced last May by the collapse of the algorithmic stablecoin terra USD (UST) and terra (LUNA), the cryptocurrency that is burned for the issuance of the stablecoin, a fact reported by CriptoNoticias.
Although he also points out that their alarms went off with the recent turmoil in the crypto asset markets, a product of the current crypto winter. It is not the first time that the FSB has called for special attention to be paid to digital assets. As CriptoNoticias reported in February, the agency called for urgent measures to contain the risks of bitcoin (BTC), due to the speed with which the cryptocurrency market is evolving.
Additionally, the FSB claims to be aligned with the measures recommended by the Financial Action Task Force (FATF), especially with the application of the so-called “travel rule”. This regulation requires, among other things, that service providers with crypto assets share the information of users who carry out operations of more than USD 1,000.