BIS Publishes New Stablecoin Report Following Ripple’s Announcemnet

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The Financial Stability Institute (FSI) at the Bank for International Settlements (BIS) has recently released a study centering on the increasing prevalence of stablecoins.

A paper has pointed out several potential hazards for stablecoin users, among which is the possibility of de-pegging. No stablecoin has successfully kept its value aligned with the underlying asset consistently. Stablecoin owners need faith in the issuer’s capacity to facilitate prompt withdrawals. Regulators worldwide have identified numerous risks that stablecoins may pose to financial security.

Regulatory bodies worldwide are in the process of creating guidelines to manage the increasing use of stablecoins, which are types of cryptocurrencies pegged to traditional currencies. The names given to these digital assets may differ depending on the specific regulatory system (e.g., e-money tokens, dollar tokens, fiat-linked coins, stablecoins, payment tokens, etc.).

In simpler terms, stablecoins can be created and managed by both traditional banks and new crypto companies following necessary authorization. Certain regions mandate that these stablecoin providers maintain sufficient reserves to ensure liquidity.

In simpler terms, the study finds that while there are some similarities, the rules governing stablecoins vary significantly among different regulatory bodies.

According to U.Today’s news, Paul Grewal, the top lawyer at Coinbase, has appealed to American legislators to pass a law that will oversee the regulation of stablecoins.

The stablecoin market currently stands at over $150 billion in value, with Tether being the major contributor to this amount. Not too long ago, Ripple, a blockchain company based in San Francisco, revealed its plans to enter this thriving market as well.

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2024-04-09 19:51