G20, IMF, The World Bank & BIS Will Complete Regulatory Stablecoin Frameworks By 2022

ASIA BLOCKCHAIN REVIEW

October 16, 2020

According to CoinDesk, The Group of Twenty (G20) — an organization of finance ministers and central bank governors representing the European Union and 19 countries across every continent — said in a report that it is working with the International Monetary Fund (IMF), the World Bank and the Bank for International Settlements (BIS) to formalize the use of central bank digital currencies (CBDC) in banking systems.

According to the report, by the end of 2022, the G20 members, the IMF, the World Bank and the BIS will have completed regulatory stablecoin frameworks and research and selection of CBDC designs, technologies and experiments.

In a report by the Financial Stability Board, entitled “Enhancing Cross Border Payments – A Stage 3 roadmap”, it roughly focuses on public and private sector commitment, regulatory, supervisory and oversight frameworks, existing payment infrastructures and arrangements, data and market practices and newer payment infrastructures and arrangements.

The report mentions that this will be a huge undertaking involving a wide range of stakeholders.

The work set out in the roadmap will need to involve close collaboration with, and direct action from, the private sector to achieve tangible improvements in payment arrangements.

The involvement of a wide range of private and public sector stakeholders, through their insights and expertise, will be key to support the successful practical implementation of the roadmap.

The nature and degree of private sector involvement will vary from one building block to another. For each building block, as one of their initial steps the bodies responsible for taking work forward will identify the most effective approach to collaborating with the private sector.

 

More generally, private sector involvement and experience will also be an important input to the annual overall reviews of the roadmap described below.

Enhancing cross-border payment arrangements is a shared global goal. Nevertheless, the perspectives and priorities vary, according to each jurisdiction’s circumstances.

During the development of this roadmap, the CPMI and the FSB have conducted outreach with a wide range of private and public sector participants.

It will be important that external outreach and involvement continue to incorporate this full diversity of perspectives, and that technical assistance is available where needed to achieve the goals.

The bodies taking forward individual building blocks or individual actions under these building blocks will publicly consult at the appropriate points, according to their own governance processes, in order to ensure transparency and accountability and benefit from as wide a range of perspectives as possible.

As the work progresses, as a general principle, any significant proposed change to international standards or domestic regulations should include time for public consultation.

Taking forward the roadmap Enhancing cross-border payments is a multi-dimensional task. This is reflected in the roadmap and in the way it will be taken forward.

Each building block and relevant actions will be taken forward by the body or bodies specified in the roadmap in accordance with the body’s own work processes, coordination processes and governance.

Progress under the overall roadmap will be coordinated by the FSB, through its Cross-Border Payments Coordination group (CPC) that developed this roadmap.

The CPC will monitor progress across the full range of building blocks and coordinate across actions where needed and report on progress to the G20 and to the public.

The CPC brings together senior representatives from relevant international bodies and a number of central banks and other financial authorities from individual jurisdictions, and its membership will be adjusted as needed to most efficiently provide overall coordination.

The bodies taking forward individual building blocks or specific actions under these building blocks will coordinate with others – including those taking forward other interconnected actions – as appropriate.

Bodies taking forward individual building blocks or individual actions will report on progress to the CPC, including on any issues arising, so that CPC can monitor and coordinate work under the overall roadmap and address any issues.

One of the first actions under the roadmap will be to reinforce momentum by setting more specific quantitative targets for addressing the four challenges (cost, speed, transparency, access), for G20 endorsement at the October 2021 G20 Summit, and to be monitored and publicly reported on over time.

These targets will be set in an inclusive manner, including through public consultation. Although such overall targets cannot fully reflect the diversity of the global cross-border payment market, and may need to be refined over time in light of experience, they will play an important role in defining the ambition of the work and creating accountability.

The FSB will present a consolidated report to the G20 each year, developed by the CPC, beginning with a report to the G20 Summit in October 2021. This consolidated reporting will provide an opportunity not only to report on progress, but also to review actions and timelines, adjust as necessary, and confirm actions for the coming year.

In this way, the roadmap will remain flexible and adapt to changing circumstances in order to meet the agreed overall roadmap goals.

Accordingly, for all actions in 2021: actions and dates are committed deliverables. For all actions beyond that date: actions and timelines are more indicative (in both content and timing).

Next steps and timings will be adjusted if needed in response to new information and confirmed for 2022 as part of the overall roadmap review to be delivered to the October 2021 G20 Summit.

Further reviews will take place at annual intervals, reporting to G20 Summits, incorporating both progress reporting and confirmation of next steps and timings.

These regular review points will also provide an opportunity for taking account of the interdependencies in the roadmap. The scope for progress in a particular building block, or the benefits to be obtained from that progress, may be dependent on progress in other building blocks.

The bodies responsible for taking forward particular actions will need to stay in close contact with work on actions with which they are interdependent. The review points will provide an opportunity to adjust overall roadmap plans in light of developments.

Source: The Financial Stability Board and CoinDesk

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