The question of how cryptocurrency should be handled has been raised by different governments. The whole system has become so intense to the point of some countries banning most of the including bitcoin. Different crypto coins have different characteristics and features and specifically stablecoins raised and issues in the current report by G20.
The report that was released today the 14th had a lot to say among them being the risk stablecoins pose to the financial stability. As part of the solution, the G20 report suggests a solution to the issue recommending regulation of stablecoins. According to the report:
“Most respondents note that stablecoins could be classified under more than one regulatory category and that the classification could change as the nature and use of a stablecoin evolves.”
If this is to happen, it would beat the whole purpose behind the radical idea of a decentralized financial system. The G20 report claims the idea of transacting freely is the major threat to financial stability.
This whole proposition is based on research they did earlier which guided to a conclusive notion. The report went on to read;
“Survey results indicate that many jurisdictions have AML/CFT regulations that seem to apply more generally to stable coin activities. The results also indicate that fewer jurisdictions have other types of financial regulation”
G20 Plan For The Regulation
In a detailed expounding, the report explains how such implementations would be done to avoid instability.
“Banks could be subject to a range of direct and indirect exposure channels in a GSC arrangement, including as an issuer, investor, lender, custodian/ wallet provider and market maker of stablecoins”
In a world where some countries like Germany have allowed banks to be custodians of crypto assets, regulation of stablecoins might not be far into the future. And this is considering Germany is part of the G20.