- A report on Stablecoins examining their most recent advancements were made public on the RBA’s website.
- The authors used the demise of Terra as an example of the fragility of algorithmic Stablecoins.
- The FSA published a report outlining its plans for handling Stablecoins.
On Thursday, a report on Stablecoins that examined their most recent advancements, hazards, and regulatory possibilities was made available on the Reserve Bank of Australia’s official website.
Even while the research pays close attention to dangers, in particular, it is relatively upbeat in stating that “stablecoins have the potential to enhance the efficiency and functioning of a range of payment and other financial services.”
The paper claims that the Australian regulators “are undertaking extensive work” to determine how to incorporate stablecoins into the national payment network without subjecting it to undue risks. The authors list these risks, including those related to energy and the environment, disruptions in the funding markets, growing bank exposure, and liquidity issues.
The authors used the demise of Terra as an example of the fragility of algorithmic stablecoins, whose stability depends on investors’ confidence in the value of an unbacked crypto asset.
The report reiterates that developing a framework for payment Stablecoins is a priority in the near term for the Code of Federal Regulations (CFR), “given the potential for these arrangements to become widely used as a means of payment and a store of value.”
On a similar tangent, the Financial Services Authority (FSA), Japan’s financial watchdog, intends to classify algorithmic stablecoins in the same category as Bitcoin. Additionally, stablecoin issuers will require licenses that classify them as a bank, supplier of financial transfer services, or trust organization.
The regulator published a report outlining its plans for handling Stablecoins. Reportedly, the algorithmic Stablecoins are intended to be grouped with Bitcoin by the FSA.