Stablecoins to face the same regulations as PayPal or Western Union
The proposal recently put forward by regulators suggests that stablecoins should follow the same policies as more traditional versions of payments services that only use fiat currencies, Reuters reports.
Previously, large companies like Facebook faced a massive wall of regulation once they tried to launch their own stablecoin that would have been used for payments inside of FB’s ecosystem.
IOSCO security regulators and the Bank for International Settlements have said that the rules currently applied to traditional payment services like PayPal should be applied to stablecoins like Tether, which are primarily used as a bridge between cryptocurrencies and coins. traditional assets.
The proposal is yet to be discussed by the public before being finalized in the next year. The new policy will most likely create the same set of rules that are being applied to the aforementioned payment service. The rules will mean that the company issuing a stablecoin will have to act as a legal person.
Stablecoins have faced massive growth during the pandemic when investors started looking for more ways to diversify their financial portfolios and enter the rapidly increasing industry.
The biggest stablecoin in the market, Tether, reached a market cap of $ 68 billion in 2021 while having less than half that amount just a year ago. According to CoinMarketCap, various stablecoins like USD Coin or Paxos faced a massive multi-billion-unit growth in terms of months.
IOSCO President Ashley Ian Alder looks forward to creating an organized legal framework for digital currencies that will lead to the development of clear and practical guiding standards.
