FSB – Publishes high-level recommendations for regulation, supervision and oversight of “Global Stablecoin” (GSC) arrangements

October 13, 2020


The report said GSC arrangements expected to adhere to applicable regulatory standards. These should address risks posed to financial stability, before commencing operations. GSC arrangements must also adapt to any new regulatory requirements as necessary.


Stablecoins are a specific category of crypto-assets, which could enhance the the efficiency of the provision of financial services and may also generate risks toward financial stability. Stablecoins are an attempt to address the high volatility of traditional crypto-assets by tying the stablecoin value to one or more other assets, such as sovereign currencies. They have the potential to bring efficiencies to payments and promote financial inclusion. A widely adopted stablecoin with a potential reach and use across multiple jurisdictions (a so-called global stablecoin or GSC) could become systemically important in and across one or many jurisdictions, including as a means of making payments.

Consultation Response

On April 14, 2020, FSB published a consultative document on addressing regulatory, supervisory and oversight challenges raised by global stablecoin arrangements. FSB received 53 responses from regulated institutions, trade associations representing technology firms and regulated institutions, regulators, consulting firms, and NGOs. FSB issued a note summarizing responses, which overall found the high-level recommendations generally appropriate to address the identified issues. Considering feedback, FSB will not adopt a specific categorization of stablecoins. The report acknowledged consequences for financial stability if AML/CFT, data privacy, cybersecurity, consumer, investor protection, competition not properly addressed. The report placed more emphasis on the need to address risks of operational or cybersecurity nature arising from the use of emerging technologies supporting GSC arrangements. Clarified recommendation 10 does not prevent the establishment of proofs-of-concept or experiments under adequate supervision of relevant authorities in certain jurisdictions. FSB committed to reviewing its recommendations regularly, to identify any potential gaps. They will update them if needed, to ensure they remain relevant, continue to promote effective regulation, supervision, oversight of GSC arrangements across jurisdictions.

GSC Regulatory Issues

GSCs may challenge the comprehensiveness, effectiveness of existing regulatory and
supervisory oversight, thus FSB agreed to adopt the 10 high-level recommendations.
To promote coordinated, effective regulation, supervision, oversight of GSC to address the financial stability risks posed by GSCs, at domestic and international level.


Call for regulation, supervision, and oversight that is proportionate to the risk involved.
Apply supervisory and oversight under the same business, same risk, same rules principle. Stress value of flexible, efficient, inclusive, cross-border cooperation and coordination. Authorities to have the power, tools, and resources, to regulate, supervise, and oversee a GSC, as well as associated functions, activities, enforce relevant law, regulations effectively. Apply comprehensive regulatory, supervisory requirements and international standards. Cooperate and coordinate domestically and internationally for effective communication, to support each other in fulfilling respective mandates of GSC across borders and sectors. Authorities should ensure GSC arrangements have in place a comprehensive governance framework and clear allocation of accountability for functions within the GSC arrangement. Ensure effective risk management, re reserve management, cybersecurity safeguards. As well as operational resilience, AML/CFT measures, and fit and proper requirements. Authorities should ensure robust systems for collecting, storing, and safeguarding data. Ensure GSC arrangements have relevant recovery, resolution plans, in event of failure. Provide users, stakeholders with comprehensive, transparent data on how GSC works, legal clarity to users on nature, the enforceability of redemption rights, and process used. GSC to meet applicable regulatory, supervisory, and oversight requirements of jurisdiction before commencing any operations.

Next Steps

FSB agreed to the completion of international standard-setting work by December 2021. Establishment or, as necessary, adjustment of cooperation arrangements among authorities by December 2021, and as needed based on market evolution. At a national level, the establishment and adjustment of regulatory, supervisory and oversight frameworks consistent with the FSB recommendations and international standards. Guidance to be in place by July 2022, as needed based on market evolution. Review of implementation, with the need to refine and adapt international standards by July 2023.

For more information, visit www.fsb.org

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