Stablecoin

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 <p class="is-style-lead">The Committee on Payment and Market Infrastructures has highlighted both the potential and the substantial challenges of adopting stablecoins in global <a rel="noopener noreferrer nofollow" title="cross-border" href="https://thebittimes.com/tag/cross-border.html">cross-border</a> payments, underscoring their current non-compliance with international regulations.</p>
 <p>Stablecoins, digital currencies pegged to other assets like fiat currencies, have been touted for their potential to enhance <a rel="noopener noreferrer nofollow" title="transaction" href="https://thebittimes.com/tag/transaction.html">transaction</a> speeds and reduce costs for <a rel="noopener noreferrer nofollow" title="cross-border" href="https://thebittimes.com/tag/cross-border.html">cross-border</a> payments. However, a recent report by the Committee on Payment and Market Infrastructures (CPMI) explores the capacity of stablecoins in fulfilling these expectations while being fully compliant with regulatory standards.</p>
 <p>The CPMI, a global standard-setting body under the Bank for International Settlements, sheds light on the various challenges and intricacies involved in integrating stablecoins into the global financial framework.</p>
 <p>Despite the potential benefits, the report underscores that potential drawbacks could significantly outweigh the advantages, highlighting issues related to coordination, competition, network scale, market structure and inconsistent international regulations.</p>
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 <p>In the fast-paced world of cryptocurrencies, the TerraUSD incident and Meta’s proposal of a stablecoin have expedited regulatory bodies’ efforts to establish comprehensive guidelines. The Financial Stability Board has echoed similar concerns, indicating that existing stablecoins might not align with upcoming global standards.</p>
 <p>The CPMI report is a continuation of an ongoing investigation initiated last October, exploring the viability of stablecoins in improving cross-border transactions. The findings state unequivocally that no stablecoin arrangements currently meet all necessary regulatory requirements.</p>
 <p>It goes on further to say if a fully compliant stablecoin were to even exist, its impact on <a rel="noopener noreferrer nofollow" title="cross-border" href="https://thebittimes.com/tag/cross-border.html">cross-border</a> payments remains uncertain, with potential negative implications.</p>
 <p>Fabio Panetta, the incoming head of CPMI and former European Central Bank board member, underscores the need for a robust <a rel="noopener noreferrer nofollow" title="cross-border" href="https://thebittimes.com/tag/cross-border.html">cross-border</a> payments network. Panetta also highlights the inherent instability of unbacked crypto and stablecoins, emphasizing their inability to guarantee constant convertibility, which then makes them susceptible to runs.</p>
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<p>Source: <a rel="noopener noreferrer nofollow" target="_blank" href="https://thebittimes.com/global-watchdog-stablecoin-cons-outweigh-pros-for-cross-border-transactions-tbt68550.html">https://thebittimes.com/global-watchdog-stablecoin-cons-outweigh-pros-for-cross-border-transactions-tbt68550.html</a></p>

Global watchdog: Stablecoin cons outweigh pros for cross-border transactions

TheBitTimes

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