International banking regulatory body backtracks on stablecoins

Quick Take

  • The Basel Committee seems less certain about stablecoins in new draft guidance on bank exposure to digital assets. 

A Switzerland-based organization that sets international banking standards released new proposed guidance for banks to manage exposure to digital assets that retracts previous draft rules for stablecoins.

The Basel Committee on Banking Supervision, which expects to finalize a new framework for banking standards by 2025, published a new version of proposed guidance for banks to follow around the handling digital assets, including “tokenized traditional assets, stablecoins and unbacked cryptoassets.”

The new draft incorporates stakeholder feedback and recent developments in crypto markets, like the algorithmic stablecoin crash last spring, and retracts an effort to allow stablecoins to be stress-tested based on whether they could be sold for an amount that closely tracks its peg value.

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