The use of cryptocurrencies is at the forefront of the agenda of the large international financial organizations. The main central banks in the world are already analyzing the formulas to launch a digital version of their currencies, which serves as a complement to cash, given the evidence of an increasingly widespread use of digital payments. And the Financial Stability Council, the body created in 2009 to ensure global financial stability after the previous crisis, today published the roadmap with which the G20 countries should improve cross-border payments and regulate the so-called stable cryptocurrencies or stablecoins.
This type of digital currency has emerged as a much less volatile alternative to bitcoin or ether and is characterized by being backed by either a currency, such as Tether or Truecoin with the US dollar; for a physical asset such as gold, such as the G-Coin or for a cryptocurrency, a more controversial formula since it uses a digital currency as support in order to give a more stable value. Although the most mediatic example of a stable cryptocurrency would be Facebook’s Libra project.
The Financial Stability Board recognizes that stablecoins they have the potential to offer a more stable financial service, although they can also pose a risk to financial stability, especially if adopted on a large scale. Its role as an alternative to the high volatility of traditional cryptocurrencies, such as bitcoin, and its ability to facilitate a more efficient payment system, capable of promoting financial inclusion, stands out. However, if they acquire a global dimension, they can become a systemic phenomenon that requires coordinated and effective regulation, which is why the agency proposes a roadmap for the efficient and controlled development of this payment formula.
The Financial Stability Council recommends that the G20 member countries have reached international standards for their use by December 2021, the date on which cooperation agreements should have been reached between global authorities, also depending on the evolution of the market.
The body also proposes that the necessary adjustments be established at the national level, in order to adapt international recommendations to national regulation and supervision, in July 2022. And it establishes July 2023 as the date to review the implementation of international standards and regulatory needs that arise.
The ultimate goal is for all cross-border payments, a priority during Saudi Arabia’s presidency of the G20 countries, including remittances, to be faster, cheaper, more transparent and more accessible, while maintaining their security.