Stablecoins, which have many of the features of earlier cryptocurrencies but seek to stabilise the price of the “coin” by linking its value to that of a pool of assets, have the potential to contribute to the development of more efficient global payment arrangements.
Against this backdrop, the Group of Seven presidency (G7) set up a working group on stablecoins, chaired by Benoît Cœuré (Chair of the CPMI), to examine the challenges, risks and benefits that global stablecoins may pose.
The Working Group’s report finds that stablecoins, regardless of size, have implications ranging from AML efforts across jurisdictions to operational resilience (including for cybersecurity), consumer/investor and data protection, and tax compliance.
Global stablecoins may amplify those challenges and could also pose challenges to competition policy, financial stability, monetary policy and, in the extreme, the international monetary system.
The report then lays out initial recommendations for both private sector stablecoin developers and public sector authorities to address the challenges and risks.
Finally, the report suggests that authorities could develop roadmaps for improving the efficiency and lowering the cost of payments and financial services.