Freshly introduced guidance regarding stablecoin arrangements (SAs) has reportedly further confirmed the principle of “same risk, same regulation” for crypto. 

Specifically, the guidance – collaboratively rolled out by the Bank for International Settlements (BIS) Committee on Payments and Market Infrastructures (CPMI) and International Organization of Securities Commissions (IOSCO) – reportedly have payment, clearing and settlement networks to systemically important SAs which move stablecoins, falling under the scope of the Principles for Financial Market Infrastructures (PFMI). 

The document is reportedly designed to be available for use by SA designers and operators and widen the scope to cover the PFMI standards to SAs without generating new standards.

“An SA may need to make changes to its rules, procedures, governance arrangements and risk management framework taking the guidance into consideration in order for its practices to be consistent with the PFMI.”

It offers definition for this SA to become “an arrangement that combines a range of functions to provide an instrument that purports to be used as a means of payment and/or store of value.” 

The guidance reportedly recommended considerations for selected which specific SAs it applies to, as only to SAs that are “systemically important” are covered by it.

The creation of the PFMI – introduced in 2012 – was reportedly a responding attempt to the 2008 financial crisis and. Every standard apply to SAs under the new guidance, although the authors decided to provide further explanation on the application of only four out of the 24 principles and key considerations: governance, risk management, settlement finality and money settlements. 

They noted that a separate piece will be issued to cover multicurrency SAs.

“This report is a significant step to establish international standards for stablecoin arrangements and a cohesive regulatory framework that safeguards the global financial system.” US Commodity Futures Trading Commission commissioner Caroline D. Pham, co-chair of the CPMI-lOSCO Policy Standing Group, further remarked.