The International Monetary Fund expresses concern about the regulation of stablecoins by jurisdictions in different countries. This can negatively affect the global financial system.
IMF in its 2021 Global Financial Stability Report
stated that stablecoins pose a risk, since they do not have a common regulatory system for all countries. In this regard, the IMF is calling for “global standards for cryptoassets.” The organization believes that this will help prevent the “risk of contamination” of adjacent markets.
The report also states that the issuers of stablecoins do not provide enough information on the principles of ensuring their value. As a result, investors do not fully understand where they are investing their money. An example is the August audit of Tether, which showed that 50% of the collateral of a stablecoin is represented by securities. In this regard, the IMF believes that the provision of securities is not enough, since they cease to be liquid in the event of a financial crisis. This means that stablecoins, the IMF believes, should be regulated in the same way as traditional currencies.
The IMF draws attention to the fact that the capitalization of the stablecoin market has reached a level comparable to some large offshore funds of the traditional foreign exchange market and therefore deserves close attention of regulators. The IMF sees the danger that attacks by criminals or regulators on stablecoins could weaken financial systems.
The development of uniform methods for regulating stablecoins is at an early stage. The Financial Stability Board has posted information on the progress of 48 countries with respect to compliance with the recommendations for regulation of stablecoins, which states that the G20 members are still in the first stage of developing the rules.
Earlier, the Bank for International Settlements (BIS) posted a draft directive, according to which payments in stablecoins must comply with international standards for payments, clearing and settlements. US Senator Cynthia Lummis believes that stablecoins should be fully backed by fiat currency and issued by banks.
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