An official committee of the Bank of England responsible for monitoring the UK economy said that it will continue to monitor developments in stablescoins and financial risks associated with these assets.
In a report of its meetings of April 4 and April 8, the Committee of Financial Policy (FPC) identifies the risks posed by stablecoins as the market of these stable cryptocurrencies with assets has increased in size and active in the last year.
“A greater emission of stablescoins offshore sterling with inappropriate support assets or support assets on which the risk is poorly managed, could be vulnerable to a greater risk of fire cows to support assets, with implications for the main financial markets in the United Kingdom.”
The organization warns against the domination of stablecoins supported by foreign currencies, even if the United Kingdom and other jurisdictions work on the development of regulatory regimes for these assets.
“Even with appropriate regulations, increased use of stalins denominated in foreign currencies could make certain savings vulnerable to the substitution of currencies and other macro-financial implications.”
The FPC claims that there are also potential implications for cross-border payments once the use of the stable reserve goes beyond cryptography regulations.
“For retail flows, the floors could see greater use of households and SMEs for cross -border payments, which can cause a substitution of currencies. For large flows, the regulations outside the central bank money could increase the risk of counterpart credit and make the volatility of cross -border flows more difficult to moderate through the liquidity facilities of central banks. ”
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