Stablecoins should follow Traditional Payments Rules : BIS
BIS gave a statement on the private stablecoins and said that Stablecoins like USDC, USDT should follow traditional payment rules.
The Bank for International Settlements (BIS) published a report on stablecoins in Collaboration with the International Organization of Securities Commissions (IOSCO).
Published report entitled ” Principles for Financial Market Infrastructures To Stablecoin Arrangements”. This report outlined the necessary things which are needed for the stablecoins to follow the existing traditional rules and regulation to avoid any kind of raised Issues from the regulators.
BIS published a type of suggestion for the stablecoin operators to bring their regulation on the operations under the existing traditional financial system.
Earlier this month, the head of the BIS’ innovation hub, Benoit Coeuré, released warning statement for the traditional financial institutions about the risk of “Defi platforms and stablecoins”.
Related: BIS Indicates Central Banks to Start Work on CBDCs
In recent years Stabelcoins gained better utilisation in the crypto space because of better stability. At present there are many types of private stablecoin in the crypto industry like USDT, USDC, PAX, BUSD and a few others also. All such stablecoins are giving better support for the crypto traders. Most of these stablecoins are backed by a small amount of fiat funds and crypto assets.
In the recent months, global regulators raised their issues with the operations of stablecoins and claimed that there are many risks associated with the stablecoins. In particular they stated that “in case of rapid fire sale of crypto assets, there are huge chances that Stabelcoins can crash with very high volatility”.
This latest released report of BIS gives a rough idea to handle the operations of stablecoins, that are going on in the crypto market without regulation. BIS helping global financial regulators to bring regulation framework to control stablecoins arrangements, issuance, governance.
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