G20 Nations Are Forming a Framework for Stablecoin Use

By Abhimanyu Krishnan | News | 13 Oct 2020

The Financial Stability Board (FSB), a global financial authority, has recommended to G20 nations a global stablecoin arrangement for assets like Facebook’s Libra, as announced on October 13.

The FSB’s report sets out high level regulation and oversight arrangements for nations, with the purpose of having a common standard to ensure stability
The framework, which will include standards for accountability, data safety, and protection against attacks and money laundering, has a deadline of 2022
G20 nations will work closely with the International Monetary Fund (IMF), the World Bank and the Bank for International Settlements (BIS) to introduce central bank digital currencies into the banking industry
The report covers several topics, including the characteristics of global stablecoins, the associated risks and vulnerabilities, cross-border regulation before concluding with the high level recommendation
Facebook’s Libra has spurred authorities from various nations to examine regulatory standards, fearing the stablecoin’s power over their sovereignties
The FSB’s recommendations include “oversight of a GSC arrangement across borders and sectors” and arrangements on “a functional basis and proportionate to their risks”