Blockchain Legal Resource

In a recent speech entitled “Reinventing the Wheel (with More Automation)”, Andrew Bailey, Governor and chief executive of the Bank of England, discussed the future of digital currencies. According to Governor Bailey, we have reached the point in the cycle of innovation in payments where it is essential that we set the standards and thus the expectations for how innovation will take effect. It should not, in his opinion, happen the other way round, with the standard setting playing catch up.

On April 14, 2020, the Financial Stability Board (FSB) issued a consultative paper entitled “Addressing the Regulatory, Supervisory and Oversight Challenges Raised by ‘Global Stablecoin’ Arrangements.” The paper considers various risks and vulnerabilities of global stablecoins, or GSCs, which are defined to include a crypto-asset that aims to maintain a stable value relative to a specified asset, or a pool or basket of assets, in each case with a potential reach and adoption across multiple jurisdictions and the potential to achieve substantial volume. The white paper then surveys existing regulatory, supervisory and oversight challenges, particularly in the cross-border context; contemplates the role of international standard setters in GSC governance; and makes high-level recommendations for regulatory, supervisory and oversight responses.

At the conclusion of its February meeting in Riyadh, the Group of Twenty (G20) Finance Ministers and Central Bank Governors issued a communiqué discussing a wide range of topics, including digital assets and stablecoins. The G20 reiterated its view that technological innovations can deliver significant benefits to the financial system and the broader economy. It remains vigilant to potential risks arising from financial innovations, including those risks related to financial stability, consumer and investor protection, anti-money laundering and countering the financing ...