Stablecoin regulation: G20 calls for implementation of regulatory standards

  • FSB insists on stablecoin regulations
  • Facebook forced to defer launch of Libra Stablecoin

The Financial Stability Board (FSB) of G20 in its most recent release has reiterated the importance of global stablecoins regulations.

This recent report follows the antecedent of its earlier report where it had elucidated on the standards of what a stablecoin should be. 

The board believes that nations can improve stablecoin regulations through cooperating with one another, sharing vital information and coordinating their activities so that the regulations would be able to cut across all of the nations.

FSB further clarified that all global stablecoins must make sure that they are following all of the stated standards and must also make provisions of how to protect against risks before they can start their operations. 

Furthermore, a roadmap of the implementation of the stablecoin regulations is expected to have been completed by December 2021. And member nations are expected to have fully implemented the regulations by 2022 and carry out a yearly review on a needs basis.

Why stablecoin regulations is a must

Upon the fact that the crypto asset, stablecoin, has been enjoying a level of wide acceptance by some sectors of the masses, countries had resisted imposing any regulations on the sector until Facebook made it known of its intention to release the Libra stablecoin.

Facebook was forced to shift the launch date of the stablecoin because it faced some resistance by regulatory body. Facebook had made it clear that the coin was only to be used across only its platform and had made it known that it was going to set up a non-profit to oversee the workings of the stablecoin.

Upon all of these reasons stated by Facebook, the G7 stood staunchly against the establishment of the coin unless the stablecoin met all of the regulatory standards governing its legal framework, and oversight requirements.

However, countries like Japan, South Korea and some European countries have began testing the possibility of having a Central Bank Digital Currency (CBDC).

New cryptocurrency law draws varied reactions, state-owned bank proffers a stablecoin

The new cryptocurrency law is seen as a skeptical and restrictive approach to #cryptocurrency from #Russia. Now #cryptoassets will be considered taxable and will not be permitted as currency to purchase goods and services.

The law “does not do anything” for crypto as Putin has acknowledged the truth about #cryptocurrency: “you will be assimilated, resistance is futile”.

Soon after President Putin signed the new cryptocurrency law, Sberbank, a state-owned company and the largest bank in Russia, announced the possibility of issuing its own token, according to its key executives.

Sergey Popov, director of the transaction business at Sberbank, says that Russia’s banking giant is thinking of issuing its own stablecoin that could be pegged one-to-one to the Russian ruble, local news agency Kommersant reported on Tuesday. Mr. Popov told reporters:

Probably, we can issue on the basis of the law that has been adopted, a token that we can peg to the ruble, such a corresponding stablecoin, which can become the basis, an instrument for settlements for some other digital financial assets.

One might recall that in May 2019, Sberbank had to suspend a crypto initiative due to the negative stance on blockchain assets held by the central bank.

Good enough for the country’s crypto population

Meanwhile, economist Mati Greenspan has said the new cryptocurrency law in Russia was just normal, noting it is not too infringing neither is it too free.

He further positioned that the great aspect of this whole thing is that nations around the world are beginning to wake up to making laws that guide crypto.

According to reports coming out of the government house, it noted that more clarity would be issued in the new laws after the president sighed them into law.

However, further clarity shows that the law will take effect from the beginning of next year. According to news outlets in Russia, the new law sees crypto as money but not the Russian federation’s official currency.

New cryptocurrency suspended penalties for trading crypto

Russian media RIA Novosti reported that the Digital Financial Assets (DFA) Bill was approved by the State Duma, the lower house of the Russian parliament, on July 22 and by the Federation Council on July 24. The law will come into force on Jan. 1, 2021. 

Chairman of the Committee of the State Duma of the Federal Assembly of the Russian Federation on Financial Markets, Anatoly Aksakov, has announced that the new bill contains no liability whatsoever.

With the new cryptocurrency law legalizing cryptocurrencies, Russians might have just been given the free will to go ahead and trade crypto without the fear of being sanctioned.

Russian banks and exchanges can become exchange operators of digital financial assets provided that they register with the central bank, the Bank of Russia.