IOSCO: Report on global stablecoin initiatives
On 23 March 2020, the International Organization of Securities Commissions (IOSCO) published a report identifying the possible implications of global stablecoin initiatives for securities markets regulators.
The report describes a hypothetical case study that is based on a hypothetical stablecoin used for domestic and cross-border payments. The hypothetical coin uses a reserve fund and intermediaries to try to achieve a stable price vis-a-vis a basket of low volatility currencies. The report finds that, depending on its structure, a global stablecoin may fall within securities market regulatory frameworks. Whether IOSCO Principles and Standards are relevant to stablecoins depends on the specific design of each initiative, along with its legal and regulatory characteristics and features. If the stablecoin project were to grow to become a financial market infrastructure (FMI), "it would be expected to comply with" the principles for FMIs (PFMIs) from the Bank for International Settlements, according to IOSCO.