Ethereum

Coinbase and Circle Challenge Basel Committee’s Stablecoin Regulations

Coinbase and Circle, two prominent players in the cryptocurrency industry, are contesting aspects of a proposal from the Basel Committee on Banking Supervision that aims to introduce stricter criteria for the regulatory treatment of stablecoins held by banks.

The committee’s consultation document, released in December, outlines requirements for stablecoins to qualify for preferential regulatory treatment under a “Group 1b category.” These requirements include maintaining low volatility and adequate liquidity. Comments on the proposal were due by March 28.

In response, Coinbase expressed disappointment with the committee’s approach in a letter submitted on March 28, criticizing many of the requirements as not being based on the actual risk these assets pose to banks. Coinbase argued that the proposed criteria seem to reflect broader policy objectives rather than strictly financial risk considerations.

Additionally, Coinbase accused the committee of aiming to significantly limit banks’ ability to hold and utilize stablecoins.

Circle, the issuer of a popular stablecoin, also raised concerns about the committee’s treatment of permissionless blockchains. The committee suggested that permissionless blockchains present unique risks and indicated they would not be allowed in Group 1 for the time being.

Circle argued that banks should be encouraged to leverage technologies like permissionless blockchains to enhance their digital transformation and cybersecurity efforts. They emphasized their successful partnerships with global banking institutions and advocated for a collaborative approach rather than stigmatizing blockchain-based financial services.

The Basel Committee on Banking Supervision, comprised of global standard setters, plays a crucial role in shaping regulatory frameworks for financial institutions worldwide.

Coinbase and Circle are pushing back against proposed stablecoin regulations from the Basel Committee on Banking Supervision. The proposed regulations aim to determine preferential treatment for stablecoins held by banks. Coinbase criticized the criteria as not being based on actual risk assessment, while Circle advocated for the use of permissionless blockchains in banking.

Featured Image: Megapixl

Please See Disclaimer

Source Link

Share with your friends!

Products You May Like

Leave a Reply

Your email address will not be published. Required fields are marked *

Please enter CoinGecko Free Api Key to get this plugin works.
x  Powerful Protection for WordPress, from Shield Security
This Site Is Protected By
Shield Security