Stablecoins Can’t Meet Global Demand According To Knot

Cryptocurrencies and stablecoins face many legal and international issues. While some coins are not accepted in some countries, issues such as security, competition, and mining waste are the subject of debate. In one such process, FSB President Klaas Knot made a statement on stablecoins this time. 

Knot Stable cryptocurrencies will not meet global standards in the future

Stablecoins Will Fail to Meet Global Requirements

According to FSB Chairman Klaas Knot, current stablecoins will not meet the “high-level” recommendations that will soon be issued by global standard setters such as the G20.

“Existing stablecoins will not meet future global requirements,” Klaas Knot, chairman of the international standard setter Financial Stability Board (FSB), said in a letter to G20 finance ministers and central bank governors.

The FSB will finalize its proposals for regulating cryptocurrencies and stablecoins by July, according to its 2023 work plan.

Stablecoins Cant Meet Global Demand According To Knot

Growing Number Of Concerns

There is no doubt that the number of stablecoins continues to grow. Although the number of real currencies in the world to which stablecoins are pegged is quite small, the growing number of stablecoins continues to be perceived as a disruptive issue in this regard. 

In addition, Knot noted that the FSB’s upcoming recommendations will strengthen the governance framework for stablecoins, redemption rights, and stabilization procedures.

How Should DeFi Assets Be Regulated?

The Financial Stability Board (FSB) warned in February 2022 that “the threat to financial stability posed by cryptocurrencies could increase significantly.” With many companies filing for bankruptcy in the past year, regulators around the world, including the FSB, are ramping up efforts to regulate the sector.

The FSB said last week that it will work with other standard-setting bodies to determine how decentralized finance (DeFi) should be regulated. It also plans to work with the International Monetary Fund (IMF) to conduct a study on regulatory concerns about cryptocurrencies.

You may be interested in: What Is The Ethereum Merge? Detailed Report to Read

Robert Taylor

Experienced Journalist with knowledge in shareholder activism, corporate governance, and asset finance reporting across various environments including online, print, and social media. Keen to learn about new sectors through the lens of journalism. I have worked as a financial journalist for over thirteen years, I worked my way up from news reporter to become deputy news editor in 2007. As a journalist, my primary focus is to ensure that my readers are well-informed on the most significant changes happening in the world of cryptocurrency, from blockchain technology to the latest market trends. In addition to staying up-to-date with breaking news stories, I am also interested in exploring the long-term potential of cryptocurrencies as a whole. I believe that blockchain technology will fundamentally change the way we conduct business, and I am excited to be a part of this transformation. My background in business and finance gives me a unique perspective on the world of cryptocurrency. I have worked with some of the biggest financial institutions in the world and have seen firsthand how the industry is evolving. I understand the challenges and opportunities that crypto presents and am eager to share my knowledge with my readers.

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