The IOSCO group and the Bank for International Settlements have present proposals on how stablecoins should be regulated, Reuters reports. According to the regulators, the stablecoin variant of cryptocurrencies would have to apply to the current financial rules.
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The public consultation on proposals is expected to by finalized by the beginning of next year. By that deadline, regulators would have to decide whether the same rules for the same type of business and accompanying risks is applicable for stablecoins. If the stablecoin market is applicable to the traditional rules, a stablecoin operator must set up a legal entity.
"This report marks significant progress in understanding the implications of stablecoin arrangements for the financial system and providing clear and practical guidance on the standards they need to meet to maintain its integrity," said IOSCO Chair, Ashley Alder.
The move comes after Bloomberg found out that the US Treasury Department is preparing new recommendations for more regulatory pressure on stablecoins as the cryptocurrency market is getting bigger. According to reports, the regulator wants to be sure that investors could confidently move money in and out of tokens. Treasury is said to release a new policy framework on how to regulate the stablecoin market in the coming weeks.
Officials are also reportedly discussing launching a review by the Financial Stability Oversight Council into whether stablecoins represent a threat to the US economy. Treasury officials are also worried about how they could keep the growth of tech giants-backed tokens under control.
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