According to a recent Financial Stability Board study, the Committee on Payments and Market Infrastructures is interested in finding out whether stablecoins can deliver on their promise of speedier, less expensive transactions.
Those who establish international payment standards strive to lower the cost of transmitting money internationally. Additionally, an international panel said on Monday that it would investigate the potential benefits of stablecoins.
According to a report released by the Financial Stability Board, an international organization tasked with monitoring the global financial system and supported by central banks and finance ministries worldwide, the Committee on Payment and Market Infrastructures, an international body that establishes standards for the sector, has stated it wants to further investigate the case for cryptos that seek to maintain value against fiat in the coming months.
The FSB said that the CPMI is “examining if and how the implementation of well-designed and risk-managed SAs [stablecoin arrangements] might facilitate cross-border payments by resolving current frictions,” with results expected to be concluded by the end of this year. As the stablecoin market is developing quickly and has the potential to have an influence on a global scale, risk management will need special attention, the paper said.
Establishing a Global Crypto Rulebook for Stablecoins
Before a meeting of finance ministers on Wednesday, the FSB, which is supported by the Bank for International Settlements (BIS) and presided over by Klaas Knot of the Dutch Central Bank, is scheduled to announce its plans to establish the global crypto rulebook, including stricter standards for stablecoins.
The FSB said last year that it wants to have credited cross-border payments available within an hour and with processing costs under 1% by 2027, and it is presently looking at a range of options for getting there. The existing high cost and volatility of sending cross-border payments, for example assisting migrant workers send remittances home, have been mentioned as a convincing reason by proponents of stablecoins such as Libra, subsequently renamed Diem, and then abandoned.
Others, though, have been more dubious, particularly after the well-publicized collapse of the algorithmic stablecoin terraUSD earlier this year. The European Central Bank expressed further skepticism in an August study, listing bitcoin and stablecoins as some of the worst cost-cutting choices and noting worries about the monopolistic market power of privately managed solutions.