Efforts to establish global guidelines for stablecoins have slowed down over the past year, sparking concerns among central bankers that inconsistent regulation could lead to market fragmentation and increased risk. According to Bank of England Governor Andrew Bailey, who chairs the Financial Stability Board, progress on international rules has stalled.
Bank for International Settlements General Manager Pablo Hernández de Cos expressed concern over the delay, emphasizing the need for global cooperation to prevent a patchwork of rules that companies could exploit by shifting operations to jurisdictions with less stringent oversight. As major economies develop their own frameworks, often with different approaches and timelines, the stablecoin sector continues to grow, with a current value of $320 billion. De Cos noted that the structure of stablecoins like USDT and USDC can resemble securities, and that redemption issues can cause price fluctuations. To reduce risk, proposals include limiting interest payments on stablecoins and providing issuers with access to central bank lending facilities.
Lawmakers in the US are working to advance the Digital Asset Market Clarity Act, which aims to establish federal rules for digital asset markets. While a compromise on stablecoin yield has been negotiated, a deal remains contingent on resolving open questions, including DeFi oversight and ethics provisions.