13 Oct 2020 Arjun Agarwal
G20, IMF And The World Bank То Develop CBDC Regulations
The finance ministers and bank governors of the EU, as well as a group from the strongest economies from all over the world, published a report, stressing the need for “the regulation, supervision, and oversight of “global stablecoin” (GSC) arrangements”. The group consists of G20 financial ministers, officials from the International Monetary Fund (IMF), the World Bank, as well as the Bank of International Settlement (BIS). According to the report, global stablecoin arrangements have to “adhere to all applicable regulatory standards… before commencing operation”.
The joint organization also outlined а roadmap for the creation of regulatory, supervisory, and oversight frameworks, which all central bank-issued digital currencies must meet. The completion of international standard-setting work is set to December 21, with the establishment and, if necessary, adjustments of cooperation arrangements among authorities also set for the end of 2021.
Counties have to develop and/or adjust national-level regulations with the recommendations of the Financial Stability Board (FSB) and international standards by July 2022, while, the review of the international regulations is set for July 2023.
“Stablecoins” is a specific category of crypto-assets which have the potential to enhance the efficiency of the provision of financial services, but may also generate risks to financial stability, particularly if they are adopted at a significant scale,” the report added.
The main goal of the regulations is to “examine the scope for new multilateral platforms, global stablecoin arrangements and central bank digital currencies to address the challenges that cross-border payments face without compromising on minimum supervisory and regulatory standards to control risks to monetary and financial stability”, the FSB noted.
The stablecoin regulation roadmap, developed by the G20, is a follow-up step from another report, issued a week earlier. The European Central Bank (ECB), alongside the U.S. Federal Reserve, the Bank of England (BOE), Bank of Canada, the Swiss National Bank, Bank of Japan, and Sweden’s Sveriges Riksbank outlined the requirements and properties CBDCs have to meet in their countries.
Europe, North America, and Japan agreed on the thesis that CBDCs need to be interchangeable with current forms of money, and closely mimic fiat cash in its ease of use and versatility. Also, CBDCs need to be connected to legacy financial infrastructure and technologies, offer 24/7 high volume transactions, to be regulatory compliant, as well as to be secured to cyberattacks.
Meanwhile, the Bank of Japan and the European Central Bank recently disclosed their plans for a potential CBDC issuance. Moreover, the Bank of England’s governor criticized Bitcoin for not having an intrinsic value. During a live Q&A session, the governor of the Bank of England, Andrew Bailey, stated that he was nervous about companies and individuals wanting to utilize Bitcoin as a means of payment, because of its high levels of volatility.Bitcoin Cryptocurrency Regulations Cryptocurrency World Bank central banks G20 Financial service cryptocurrencies bank cryptocurrency news digital asset digital Stablecoin Regulation Banks Stablecoins Payments Regulations CBDC