The G20 is considering 10 of the rules for the regulation of stable coins such as Facebook-Libra

The G20 lays down rules to regulate stable coins such as the crypto-currency Libra from Facebook. As a response to a request by the G20, the Financial Stability Board (FSB) ten “high-level” recommendations are presented, which determine a regulatory framework for stablecoins.

The G20 Finance Ministers and Central Bank governors will meet on Wednesday under the presidency of the G20, Saudi Arabia, to discuss “urgent measures and to take the pandemic are to tackle the global challenge posed by the Covid-19-required,” announced the host, Saudi Arabia. The Meeting of G20 Finance chiefs in April is traditionally held in Washington, D.C., but due to the global outbreak of the Coronavirus, the G20 held a Meeting currently virtual.

In the run-up to the meeting, the Financial Stability Board (FSB) published on Tuesday ten “high-level” recommendations “to the authorities at the level of Jurisdiction, consistent and effective regulation and Supervision” of the global stable coins to advance. The Supervisory authority of the G20, said:

The recommendations correspond to a call by the G20 to examine regulatory issues raised by “global Stablecoin”arrangements, and to advise, where appropriate, multilateral responses to, the perspective of Emerging and developing countries should be taken into account.

The FSB is an international body for the global financial system is monitored and recommendations to pronounce; all G20 countries have members in the Board of Directors. Regulators worldwide call Stablecoins, which can achieve orders of magnitude, as the global stable coins; an example of Facebook’s proposed cryptocurrency Libra is. The recommendations will be delivered to the G20 Finance Ministers and Central Bank governors for their virtual Meeting on Wednesday. The FSB invites comments on its recommendations, the up to 15. July should be submitted.

Published on Tuesday, the consultation paper entitled “Addressing the regulatory, supervisory and oversight challenges raised by global stablecoin’ arrangements” has submitted to the FSB by the G20 with his ten high-level recommendations.

The first is to ensure that the competent authorities have the necessary powers, tools and resources, in order to regulate global Stablecoin agreements, including its multi-functional activities, and to monitor, to “the relevant laws and regulations effectively enforce”. Secondly, the FSB recommends:

The authorities should apply the regulatory requirements of the GSC [global stablecoin] agreements on a functional Basis and proportionate to their risks.

Next, the FSB suggests that the authorities “ensure that there is comprehensive regulation, supervision and control of the CSF agreement across borders and sectors”. You should work together “at home and abroad, and to coordinate between” to regulate stablecoins across borders and sectors.

The fourth recommendation is that the authorities should have in place a comprehensive Governance framework with a clear allocation of responsibilities for global stablecoins. The regulatory authority also recommends ensuring an effective risk management framework for these coins, especially in terms of “reserve management, operational resilience, Cyber-security measures and measures to combat money laundering and the financing of terrorism, as well as the requirements of “Fitness and propriety”.

The authorities should also ensure that the global stable coins have “robust systems in place for the protection, collection, storage and management of data,” said the FSB in its sixth recommendation. You should also have “appropriate recovery and resolution plans”, the seventh proposal of the FSB.

The position that global Stablecoins users and interest groups to provide comprehensive and transparent information is available, is the next recommendation. In addition, the Board proposes that the authorities ensure that certain Stablecoins “give the users legal clarity on the nature and enforceability of any redemption rights and the procedure for the redemption, to the extent applicable,”.

Finally, the authorities should ensure that stable coins “comply with all applicable regulatory, Supervisory and monitoring requirements of a particular jurisdiction before you will be in this jurisdiction, and systems and products can be designed which can adapt, if necessary, to new regulatory requirements”.

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