BIS Says ‘Strongly Coordinated’ International Efforts’ Needed To Prevent Stablecoin Regulatory Arbitrage
The Bank for International Settlements says coordinated international efforts are necessary for stablecoin regulation.
According to a new BIS release from the organization’s Committee on Payments and Market Infrastructures (CPMI), stablecoin technology offers both new financial opportunities and challenges, but its drawbacks may outweigh the benefits.
Says the report,
“The use of stablecoins in cross-border payments could open up opportunities (in terms of increasing their speed and lowering their costs, as well as expanding the set of options and improving transparency). At the same time, the challenges could include coordination, competition, network scale and market structure, and the lack of internationally consistent and effective regulation, supervision and oversight.
Even a PDR SA (Personal Data Request Service Agreement) may not necessarily have a positive impact on cross-border payments as the drawbacks could outweigh any potential benefits.”
According to the BIS, standard regulation of stablecoin service agreements (SAs) may not be enough, and that “improvements in existing payment infrastructures or the development of CBDCs (central bank digital currencies)” may be explored instead.
BIS says coordinated international efforts are necessary to prevent the regulatory arbitrage of stablecoin technology.
“Strongly coordinated efforts at the international level are needed to avoid regulatory arbitrage while allowing for sufficient flexibility such that jurisdictional-specific risks and concerns are addressed.
Given the significant risks posed to EMDEs in the form of currency substitution and potential loss of seigniorage, additional focus may be given to the steps (including the possibility to limit or prohibit the use of SAs) to mitigate risks to the national payment and monetary system as well as to financial stability, where authorities determine that the use of SAs may interfere with central bank mandate for monetary and financial stability.”
Early in October, the BIS and three central banks completed a cross-border trading experiment using central bank digital currencies (CBDCs) and decentralized finance (DeFi) technology.
Don’t Miss a Beat – Subscribe to get email alerts delivered directly to your inbox
Check Price Action
Follow us on Twitter, Facebook and Telegram
Surf The Daily Hodl Mix
 
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Generated Image: Midjourney
The post BIS Says ‘Strongly Coordinated’ International Efforts’ Needed To Prevent Stablecoin Regulatory Arbitrage appeared first on The Daily Hodl.
Go to Source
Author: Daily Hodl Staff
