Summary of document history
In October 2022, the FSB published a review of its High-level Recommendations, including how any gaps identified could be addressed by existing frameworks, considering recent market and policy developments.
These final revised recommendations take into account feedback from a public consultation and stakeholder outreach.
The High-level Recommendations seek to promote consistent and effective regulation, supervision and oversight of global stablecoin arrangements (GSCs) across jurisdictions to address the potential financial stability risks they pose, both at the domestic and international level, while supporting responsible innovation and providing sufficient flexibility for jurisdictions to implement domestic approaches.
The recommendations are addressed to financial regulatory, supervisory and oversight authorities at a jurisdictional level. They should be applied by individual authorities to the extent they fall within the authorities’ remits.
The recommendations take a broad approach to GSCs and are intended to be flexible so that they can be incorporated into the wide variety of regulatory frameworks potentially applicable to GSCs around the world. Where international sectoral standards apply to a GSC for a particular economic function, those standards will address risks specific to the economic function and, as such, authorities should implement those international standards.
Final recommendations
Recommendation 1: Authorities’ readiness to regulate and supervise global stablecoin arrangements
Authorities should have and utilise the appropriate powers and tools, and adequate resources, to comprehensively regulate, supervise, and oversee a GSC arrangement and its associated functions and activities, and enforce relevant laws and regulations effectively.
Recommendation 2: Comprehensive oversight of GSC activities and functions
Authorities should apply comprehensive and effective regulatory, supervisory and oversight requirements consistent with international standards to GSC arrangements on a functional basis and proportionate to their risks insofar as such requirements are consistent with their respective mandates.
Recommendation 3: Cross-border cooperation, coordination and information sharing
Authorities should cooperate and coordinate with each other, both domestically and internationally, to foster efficient and effective communication, information sharing and consultation in order to support each other in fulfilling their respective mandates and to ensure comprehensive regulation, supervision, and oversight of a GSC arrangement across borders and sectors, and to encourage consistency of regulatory and supervisory outcomes.
Recommendation 4: Governance structures and decentralised operations
Authorities should require that GSC arrangements have in place and disclose a comprehensive governance framework with clear and direct lines of responsibility and accountability for all functions and activities within the GSC arrangement.
Recommendation 5: Risk management
Authorities should require that GSC arrangements have effective risk management frameworks in place that comprehensively address all material risks associated with their functions and activities, especially with regard to operational resilience, cyber security safeguards and AML/CFT measures, as well as “fit and proper” requirements, if applicable, and consistent with jurisdictions’ laws and regulations.
Recommendation 6: Data storage and access to data
Authorities should require that GSC arrangements have in place robust frameworks, including systems and processes for the collecting, storing, safeguarding and timely and accurate reporting of data. Authorities should have access to the data as necessary and appropriate to fulfil their regulatory, supervisory and oversight mandates.
Recommendation 7: Recovery and resolution of the GSC
Authorities should require that GSC arrangements have appropriate recovery and resolution plans.
Recommendation 8: Disclosures
Authorities should require that GSC issuers and, where applicable, other participants in the GSC arrangements provide all users and relevant stakeholders with comprehensive and transparent information to understand the functioning of the GSC arrangement, including with respect to the governance framework, any conflicts of interest and their management, redemption rights, stabilisation mechanism, operations, risk management framework and financial condition.
Recommendation 9: Redemption rights, stabilisation, and prudential requirements
Authorities should require that GSC arrangements provide a robust legal claim to all users against the issuer and/or underlying reserve assets and guarantee timely redemption. For GSCs referenced to a single fiat currency, redemption should be at par into fiat. To maintain a stable value at all times and mitigate the risks of runs, authorities should require GSC arrangements to have an effective stabilisation mechanism, clear redemption rights and meet prudential requirements.
Recommendation 10: Conformance with regulatory, supervisory and oversight requirements before commencing operations
Authorities should require that GSC arrangements meet all applicable regulatory, supervisory and oversight requirements of a particular jurisdiction before commencing any operations in that jurisdiction and adapt to new regulatory requirements as necessary and as appropriate.