Assessing the role of stablecoins for payments and settlements will be a priority for the Financial Stability Board (FSB), Andrew Bailey, the recently appointed chair of the FSB and governor of the Bank of England, said in a letter to the G20 on Monday.
Bailey, who started his role as chair in July, said the FSB should continue implementing its agreed stablecoins recommendations and monitor developments in this area across jurisdictions, ahead of the two day G20 meeting that starts on Thursday.
The FSB, in 2021 suggested rules to monitor stablecoins in order to prevent them from disrupting the world’s economy following their rise. The body which promotes global financial stability said last year, it would conduct further work on the challenges posed by stablecoins in emerging and developing economies, which have higher levels of adoption.
Bailey also recently cautioned against global investment banks developing their own stablecoins in an interview with the Times. He argued that stablecoins could potentially weaken credit creation and monetary policy control.
Stablecoins have increasingly become a priority for regulators across the globe, with the U.S. Senate passing stablecoin bill GENIUS and the stabelcoin market propelling to new highs.