The Bank for International Settlements (BIS) warns that the rapid development of stablecoins is creating serious policy challenges and could undermine the monetary sovereignty of major markets.

Stablecoins currently hold a market value of approximately 255 billion USD, primarily concentrated in two USD-pegged tokens, necessitating tighter financial management to avoid risks associated with integration into the traditional financial system.

MAIN CONTENT

  • The global value of stablecoins has doubled, reaching approximately 255 billion USD in 2023.

  • Over 90% of circulating stablecoins are concentrated in two USD-pegged tokens.

  • The BIS emphasizes the need for closer supervision from financial authorities to protect monetary sovereignty.

What are stablecoins and why is the BIS concerned about their development?

The Bank for International Settlements describes stablecoins as cryptocurrencies pegged to fiat currencies like the USD, helping to maintain stable value. The rapid growth of stablecoins has created new pressures on global financial policies.

The development of stablecoins affects the financial system as they are not only widely used in decentralized payments but also deeply interact with traditional financial institutions. The BIS warns that this could lead to a loss of control over monetary policy if effective control measures are not implemented.

What is the current state of the stablecoin market?

According to the latest BIS report (July 2023), the total market value of stablecoins has reached approximately 255 billion USD, doubling from the previous year. Of this, over 90% of the value is concentrated in two dominant USD-pegged tokens.

Rapidly developing stablecoins are not only an opportunity but also a systemic risk if regulators do not coordinate more closely.
Agustín Carstens, General Manager of BIS, July 2023

Market concentration makes these stablecoins vulnerable to unusual events, affecting the stability of the monetary market and the entire international finance.

Why is oversight of stablecoins necessary?

BIS financial experts emphasize that the integration of stablecoins with the traditional banking system requires regulators to have stricter regulations to avoid financial risks and protect national monetary sovereignty.

The lack of a clear legal framework could lead to some stablecoins becoming uncontrolled cross-border value transfer mediums, causing instability in money supply and inflation in major markets.

The uncontrolled growth of stablecoins could reduce the effectiveness of monetary policies, negatively affecting major economies around the world.
Martin Brunner, financial economics expert, BIS report 2023

How do stablecoins impact monetary sovereignty?

USD-pegged stablecoins operate on a decentralized platform, creating challenges in controlling and regulating national currency. The BIS warns that if stablecoins become widely popular, central banks may lose control over the money supply in the economy.

For example, when over 90% of stablecoins are related to the USD, it can have a significant impact on the USD and create a dependency that makes it difficult for other countries to control their monetary policy.

How should stablecoin management measures be applied?

The BIS proposes that global financial regulators need to coordinate to build synchronized legal frameworks, focusing on transparency, security, and accountability for large-scale stablecoins, to maintain market stability and protect monetary security.

Applying international standards for stablecoins and requiring transparent financial reporting will help mitigate risks and enhance trust in the global financial system.

Comparison table between the impact of stablecoins and traditional fiat money

Criteria Stablecoin Traditional Fiat Currency Value Volatility Stable due to pegging, but not completely fixed Stable due to direct management by central banks Control Decentralized, difficult to fully control Strictly managed by central banks Scope of Use Global, easy to use across borders Monetary Policy Risks Could undermine national control Designed to support monetary policy

Frequently Asked Questions

1. How does the rapid growth of stablecoins impact the economy?

The potential to create risks for the financial system and affect monetary policy if not closely managed, according to the BIS report.

2. What proportion of the market do USD-pegged stablecoins represent?

Over 90% of the current stablecoin market value is concentrated in two USD-pegged tokens, according to BIS data in 2023.

3. Why is monetary sovereignty threatened by stablecoins?

Since stablecoins operate decentralized, they can undermine the central bank's control over the money supply, reducing the effectiveness of monetary policy.

4. What should financial authorities do to manage stablecoins?

It is necessary to establish a comprehensive legal framework, transparent and coordinated internationally to control risks and protect user interests.

5. How can stablecoins affect the USD?

The concentration of stablecoin pegging to the USD may increase pressure on the USD and distort the structure of the global monetary market.

Source: https://tintucbitcoin.com/stablecoin-phat-trien-thach-thuc-chinh-sach/

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