Bank of International Settlements Publishes New Stablecoin Report Following Ripple’s Announcement

Members of the Financial Stability Institute (FSI) of the Bank for International Settlements (BIS) have published a new paper that focuses on the proliferation of stablecoins. The paper mentioned several risks that stablecoins pose to their holders, which include possible instances of de-pegging. Not a single stablecoin has so far managed to maintain parity with the underlying asset “at all times.”

Stablecoin holders should have confidence in the issuer’s ability to ensure timely redemptions. Authorities around the globe have also singled out various risks that stablecoins pose to financial stability.  Standard-setting bodies around the world are currently working on a regulatory framework that would address the rapid rise of stablecoins. The terms used to denote fiat-backed cryptocurrencies can vary across different regulatory frameworks (e-money tokens, dollar tokens, fiat-references, stablecoins, payment tokens, and so on).