The G20 is setting rules to regulate stablecoins such as Facebook’s Libra cryptocurrency. Responding to a call by the G20, the Financial Stability Board (FSB) has provided 10 “high-level” recommendations that establish a regulatory framework for stablecoins.
G20 Sets International Rules for Stablecoins
The G20 finance ministers and central bank governors will meet under Saudi Arabia’s G20 presidency on Wednesday to “discuss and take urgent actions needed to address the global challenge presented by the covid-19 pandemic,” host country Saudi Arabia announced. The April G20 finance chiefs’ meeting is traditionally held in Washington, D.C., but due to the coronavirus outbreak worldwide, G20 meetings are currently held virtually, and more frequently.
Ahead of the meeting, the Financial Stability Board (FSB) published 10 “high-level” recommendations on Tuesday that “addressed to authorities at jurisdictional level to advance consistent and effective regulation and supervision” of global stablecoins. The G20 regulatory watchdog explained:
The recommendations respond to a call by the G20 to examine regulatory issues raised by ‘global stablecoin’ arrangements and to advise on multilateral responses as appropriate, taking into account the perspective of emerging market and developing economies.
The G20 finance ministers and central bank governors are meeting virtually on Wednesday under Saudi Arabia’s presidency. Among the topics they will discuss is the issue of regulating stablecoins like Facebook’s proposed Libra cryptocurrency.
The FSB is an international body that monitors and makes recommendations about the global financial system; all G20 countries have members on the Board. Regulators worldwide refer to stablecoins that can quickly achieve scale as global stablecoins; an example is Facebook’s proposed cryptocurrency, Libra. The recommendations will be delivered to the G20 finance ministers and central bank governors for their virtual meeting on Wednesday.