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Regulating the Crypto Ecosystem: The Case of Stablecoins and Arrangements
Author:
Parma Bains
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,
Arif Ismail
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Fabiana Melo
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Nobuyasu Sugimoto
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Series:
Fintech Notes
Volume/Issue:
Volume 2022: Issue 008
Language:
English
Publication Date:
26 Sep 2022
DOI:
https://doi.org/10.5089/9798400221675.063
ISBN:
9798400221675
ISSN:
2664-5912
Pages:
47
Keywords:
stablecoin; DLT; crypto-asset; DeFi; Tether; TerraUSD; FSB; CPMI-IOSCO; IOSCO; regulation; Economic sectors; Emerging technologies; Financial crises; Financial sector policy and analysis; Financial sector stability; Financial services; Fintech; Systemic risk; Technology; IMF Fintech Note 2022/008; crypto Ecosystem; Stablecoin regulation; Infrasctructures to Stablecoin arrangement; e-money regulation; Virtual currencies; Blockchain and DLT; Reserve assets; Deposit insurance; Digital currencies; Global
Legal-disclaimer:
Fintech Notes offer practical advice from IMF staff members to policymakers on important issues. The views expressed in Fintech Notes are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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Stablecoins have experienced periods of rapid growth, accelerated links with traditional finance. Without proper regulation, contagion risks to wider financial sector will increase. Global regulation for stablecoins should be comprehensive, consistent, risk-based, flexible, and focus on their structural features and use. Requirements on stablecoins should cover the entire ecosystem and all its key functions, and there should be additional oversight for systemic stablecoin arrangements. In markets where risks are growing quickly, authorities should take immediate action by using all the tools at their disposal. This note provides key elements that should feature in any regulatory arrangement. For effective implementation, domestic and international collaboration are key.
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Cover FinTech Notes
FinTech Notes
ISSN:
2664-5912
Publisher:
International Monetary Fund
Volume 2022: Issue 008