Global stablecoin rules slow down as BIS urges cooperation to avoid fragmentation risks

Progress on international stablecoin regulations has slowed, raising concerns among central bankers about potential market fragmentation and amplified risks. The Bank for International Settlements (BIS) General Manager Pablo Hernández de Cos emphasized the critical need for global coordination to prevent regulatory arbitrage, where firms exploit lighter oversight in certain jurisdictions. This warning comes as major economies develop their own frameworks with varying approaches. The stablecoin market, now valued at $320 billion, is dominated by Tether's USDT and Circle's USDC. De Cos highlighted that stablecoins can resemble securities, and redemption frictions can lead to price deviations from their peg. He also noted the risk of sudden withdrawals impacting markets. Proposed safeguards include limiting interest payments and providing issuers with access to central bank backstops or deposit insurance. In the U.S., legislative efforts like the Digital Asset Market Clarity Act are underway, with ongoing negotiations to resolve open questions regarding DeFi oversight and yield provisions.

(Source：CoinDesk)