What You Need to Know

• The Financial Stability Board (FSB) will prioritize assessing the role of stablecoins for payment and settlement, according to Andrew Bailey, its chair.
• Globally, stablecoins are becoming a regulatory focus, especially following the U.S. Senate’s passage of the GENIUS stablecoin bill.

In a letter to the G20, Bailey emphasized that the FSB will persist in implementing its recommended regulations regarding stablecoins and will oversee developments within different jurisdictions prior to the G20 meeting that begins this Thursday.

“The FSB should continue implementing its agreed stablecoins recommendations and monitor developments in this area across jurisdictions.”
Translation: The FSB must maintain focus on its established recommendations concerning stablecoins while tracking various developments globally.

The FSB previously suggested rules to monitor stablecoins to avert potential disruptions to the global economy amid their rising popularity. In 2021, it highlighted the need for further examination of challenges posed by stablecoins, especially in emerging economies that show higher adoption rates.

Recently, Bailey raised concerns about global investment banks developing their own stablecoins, arguing that this could undermine credit creation and monetary policy effectiveness.

With the stablecoin market reaching new heights, it remains critical for regulators to establish effective frameworks that protect market stability.