The Bank for International Settlements’ Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) published their final guidance on regulating stablecoins Wednesday.

The guidance is a step toward implementing a “same risk, same regulation” legal framework for stablecoins, which are cryptocurrencies whose value is fixed relative to some other asset, such as national currency or gold.

The CPMI is the BIS forum for international payments and settlements. IOSCO is an organization of the world’s securities regulators.

If a stablecoin performs a transfer function and regulators think it important to financial systems, it should observe the Principles for Financial Market Infrastructures (PFMI) just as a different instrument performing that function would have to, the BIS said in a statement. The principles are the international standards for financial market infrastructures. Countries would decide for themselves whether or not they want to put them in place, it said.

The collapse of Terra’s stablecoin UST in May stirred regulators across the world to call for further regulation. CPMI Chair Jon Cunliffe, who is also a deputy governor of the Bank of England, encouraged regulators to get on with regulating the sector in a speech earlier this week. Meanwhile, the European Systemic Risk Board, which oversees the European Union’s financial system, also said it plans to make proposals on how global standards can be set for crypto assets that could pose a threat to the financial system.

“Recent developments in the crypto asset market have again brought urgency for authorities to address the potential risks posed by crypto assets, including stablecoins more broadly,” Cunliffe said in the report.

This final guidance follows the consultation the two bodies launched last October.

The CPMI and IOSCO will continue examining regulatory issues associated with stablecoin arrangements and coordinate with other standard-setting bodies, they said.


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