The G20 recently released a new document dealing with payments between different countries. In the publication, the group highlighted how stablecoins evolve when discussing the regulation of the crypto market.
Stable-priced digital currencies were cited by the Financial Stability Board (FSB) in the G20 report The Roadmap for Enhancing Cross-border Payments.
The document, published on October 10, 2022, confirms that the crypto market is evolving, but that regulation for the industry has yet to be passed.
The G20 council points out that the crypto market needs “an effective stabilization mechanism.” The report further explains that a global regulatory framework must be created for the crypto market, considering banking institutions’ exposure to crypto assets.
“Highlighting the importance of having a prudent global minimum framework to mitigate risks from crypto assets, the consultation paper is considering issues related to, among others, unbacked crypto assets and stablecoins.”
The evolution of stablecoins
Stablecoins with prices pegged to fiat currencies, such as the BRZ, are “rapidly evolving” in the financial marketplace, according to the G20 council responsible for the report The Roadmap for Enhancing Cross-border Payments.
The council advises that the evolution of stablecoins on a global scale creates a need to assess the risk management of these projects, which like crypto assets, lack regulation.
“As the stablecoin industry is evolving rapidly with the potential to have an impact on a global scale, attention will be needed around risk management”.
The evolution of stablecoin projects in the crypto market will also be valuable for the G20 to assess how digital currencies can improve the payment industry. The concern of the group of countries is to “protect the financial system from potential risks of financial instability”.