The Financial Stability Board has published a report on regulatory issues arising with respect to so-called stablecoins. The FSB defines a stablecoin as "a crypto-asset designed to maintain a stable value relative to another asset (typically a unit of currency or commodity) or a basket of assets" which may be "collateralised by fiat currency or commodities, or supported by algorithms". It uses the term "global stablecoins" to refer to "stablecoins with a potential global reach and the ability to rapidly scale in terms of users/holders of the crypto-asset".
Noting that global stablecoins, such as Libra, could change the FSB's existing assessment that crypto-assets do not present a material risk to financial stability, the FSB intends to examine existing supervisory and regulatory approaches in the area, focusing on any cross-border issues. The FSB will use that information to consider whether regulatory changes are necessary to address any risk concerns that a single stablecoin or stablecoins as an ecosystem may raise. Following that, the FSB will advise on any multilateral responses that may be needed to mitigate against a risk to financial stability. The FSB will publish an advisory report in April 2020 and the final report to the G20 ministers in July 2020.
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