Many Stablecoins Failing to Meet Forthcoming Global Standards: FSB

• The Financial Stability Board (FSB) is set to release regulations for crypto and stablecoins in July 2023.
• Existing stablecoins are unlikely to meet the standards set by the FSB and other international standard setters.
• The FSB is also working with the International Monetary Fund (IMF) on paper about regulatory issues related to cryptocurrencies.

Table of Contents:
• Overview of Regulations
• Impact on Existing Stablecoins
• Working with IMF

Overview of Regulations:
The Financial Stability Board (FSB) has announced that it will be releasing its recommendations for regulating crypto and stablecoins by July 2023, as part of its work plan for 2023. This comes as regulators around the world have been taking steps to oversee payments-focused stablecoins, most of which are backed by fiat currency reserves in the form of cash equivalents – or unsecured short-term debt. The FSB’s upcoming guidance targets the strengthening of governance frameworks, redemption rights and stabilization mechanisms for these digital assets. Klaas Knot, Chairperson at FSB, noted that many existing stablecoin projects would not meet the “high-level” recommendations soon to be set by global standard setters such as his organization. In addition, he noted that many existing coins would not comply with payment or securities standards either.

Impact on Existing Stablecoins:
This news means that many existing stablecoin projects may need to adjust their operations so as to adhere to forthcoming global standards recommended by organizations like the FSB if they wish remain competitive within this space going forward. Many issuers have made efforts over recent months towards improving transparency and cutting private debt out of their reserves but these measures may still not be enough in order to meet regulatory requirements put forth next year when global guidelines arrive in full force. As such, stakeholders within this ecosystem should consider making amendments where necessary ahead of time so as avoid any potential disruption come implementation day – a move which could help them stay one step ahead once new rules enter into effect globally next summertime..

Working with IMF: Last week, it was reported that the FSB will be working alongside other standard-setting bodies such as International Monetary Fund (IMF) when determining how decentralized finance (DeFi) should be regulated moving forward – an effort which involves producing a paper tackling related regulatory issues concerning cryptocurrency assets overall. This collaboration between two major international authorities further demonstrates how serious regulators are getting about ensuring compliance amongst those operating within this sector going forwards – signaling tougher times ahead for those who fail abide by future rules & regulations once they become effective across all jurisdictions involved..