Yesterday the Financial Stability Board (FSB) published its G20 recommendations on global stablecoins (GSC), which suggested new standards for global regulations be set by mid-2022. The paper says those regulations could also apply to wholesale stablecoins. Fnality, the institutional payment system backed by 14 global banks and Nasdaq, is due to launch next year, subject to central bank go ahead. The company’s solution, formerly called the Utility Settlement Coin, aims to provide bank to bank payments using tokens backed by central bank deposits. And JP Morgan also has its JPM Coin, which tokenizes bank balances.
The question is whether Fnality’s solution or the JPM Coin are wholesale global stablecoins or just payment systems and hence whether pending legislation might cause delays. Or in the case of Fnality, whether it’s a synthetic CBDC.
Fnality doesn’t position itself as a stablecoin as demonstrated by Fnality’s response to Ledger Insights: “Our legal analysis indicates that we are a payments system and our conversations with the overseers point in the direction that they view us in the same way. Although Fnality uses DLT we are not creating a crypto-asset, such as a stablecoin, and we expect to be regulated as a Financial Market Infrastructure under existing rules.”
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