FSB to Focus on Risks of Stablecoin Arrangements in Emerging Economies

• The FSB will focus on risks of stablecoins in emerging economies.
• Challenges from increased stablecoin adoption in the crypto sector will be considered.
• FSB discussed challenges in monetary policy and capital flow management in EMDEs.
• Global stablecoin arrangements in EMDEs pose higher adoption and risks.
• Stablecoin regulation remains unresolved between G7 and G20 nations.
• FSB will undertake further work to address challenges posed by stablecoins.

Summary :
The Financial Stability Board (FSB) has announced that it will be focusing more on the risks posed by stablecoin arrangements in emerging and developing economies. The FSB, which monitors the global financial system for systemic risk, made this decision during a meeting in Toronto. A stablecoin is a type of cryptocurrency that is pegged to another asset, such as the dollar or gold. The FSB has been actively involved in shaping global crypto policy and last year, along with the International Monetary Fund, it released a joint policy paper on crypto. The FSB has warned against implementing blanket bans to mitigate risks associated with the sector. During the meeting, FSB members discussed areas in the crypto sector that require further attention. They highlighted the challenges posed by the higher levels of adoption and risks of global stablecoin arrangements in emerging market and developing economies. The FSB will be conducting further work to address these challenges. The regulation of stablecoins has been a point of contention between the Group of 7 (G7) and the larger G20. These differences remain unresolved, even after a recent G7 summit in Italy.

Sources :

- Coindesk