Today IOSCO, the international association of securities regulators, and the BIS published a report on systemic stablecoins. Apart from reiterating that ‘same risks, same rules’ needs to apply, it provides guidance on identifying whether a stablecoin is systemic. And the bar is pretty high.
The paper also addresses some specific issues. Our reading of the governance guidance is it makes permissioned blockchains preferable, but we’re not clear whether public blockchains are impossible.
Systemic stablecoins must comply with the Principles of Financial Market Infrastructures (PFMI), a list of rules the largest financial institutions adhere to. And today’s guidance suggests how these might be applied stablecoins.
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