The IMF and FSB have introduced new cryptocurrency risk-mitigation standards at India’s request. They argue that cryptocurrencies pose risks to financial stability, especially in countries with lax regulations. To address these risks, governments are advised to safeguard monetary sovereignty and avoid granting legal tender status to cryptocurrencies.
The report also highlights concerns about stablecoins and suggests clear accountability and risk management for stablecoin issuers. Some countries are developing stablecoins pegged to their national currencies, which could align better with financial stability regulations.
Danny Chong, CEO of Tranchess, revealed a lesser-known development: some countries are in the process of creating their stablecoins pegged to their national currencies. An example of this is the Singapore dollar-backed coin, supported by new regulations proposed by Singapore’s monetary authority, along with the potential emergence of euro-backed stablecoins upon the enactment of Europe’s Markets in Crypto-Assets (MiCA) legislation next year.
Traditional finance remains strong, and regulations are essential for the responsible development of decentralized finance (DeFi) to prevent hacks and scams.
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