BASEL, Switzerland—The Financial Stability Institute, part of the Bank for International Settlements (BIS), has published a review of stablecoin regulations across several jurisdictions.
“At a high level, many national regulations address the same general topics but differ significantly in detail, creating scope for regulatory arbitrage,” Ledger Insights reported.
According to the BIS study, “A consistent regulatory framework, as well as its global implementation, is essential to address stablecoins’ risks, prevent regulatory arbitrage and ensure a level playing field in the digital asset ecosystem.”
The Topics Explored
The paper explores how different jurisdictions compare across several topics, including:
- Licensing approaches
- Composition and attestation of reserves
- Safeguarding and segregation of reserves
- Redemption rights
- Capital and liquidity requirements
- Governance and risk management
- Disclosure and marketing.
The Key Differences
Key differences start with the terminology that determines the scope of regulations, Ledger Insights said.
The paper highlights, “In some jurisdictions, this terminology refers to whether in-scope stablecoins are pegged to a single fiat currency and/or whether they are primarily intended to facilitate payments. In others, the definition refers to whether stablecoins are backed in whole or in part by fiat currencies.”
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