G20 watchdog calls for regulation of global stablecoins

The Financial Stability Board (FSB) has called for regulatory overhaul of “global stablecoins” including Facebook’s Libra and Bitfinex’s Tether.

Stablecoins have been a hot topic in cryptocurrency over the past few years with traditional finance execs lamenting its unregulated nature while die hard crypto supporters believe it’s a vital part of the ecosystem.

However, the FSB, which coordinates rules for the G20, has produced ten “high-level” recommendations to regulate stablecoins on a global level.

“The recommendations aim to mitigate the potential risks with the use of GSCs [global stablecoins] as means of payment and/or store of value, both at the domestic and international level, while supporting responsible innovation and providing sufficient flexibility for jurisdictions to implement domestic approaches,” the FSB wrote in the report.

It continues by stating that it aims to bring in regulations that are “proportionate to the risks” associated with stablecoins.

Of the 10 recommendations the FSB appeals for a comprehensive global supervision of stablecoins, with authorities and law enforcement being enabled to clamp down on illicit use.

The FSB has requested public feedback on the recommendations with a deadline being set for July 15, three months before the final recommendations will be published.

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