The US$200 billion stablecoin market is at the forefront of transforming the digital financial ecosystem, bridging traditional finance with the growing momentum of digital assets. However, as regulatory frameworks evolve, balancing consumer and market protections with the benefits of inherently global assets has become increasingly complex. Onerous localization requirements, which are emerging in some major jurisdictionsʼ stablecoin regulatory regimes, are one such example which can have significant unintended consequences.
Stablecoins are uniquely characterized by their fungibility, a trait that underpins their effectiveness in seamless cross-border transactions and liquidity. However, overly restrictive regulations could undermine these benefits, ultimately impacting their uniform valuation, economic competitiveness and utility as an essential component of a digitally integrated financial system.
For jurisdictions that wish to become digital asset and tokenization hubs, enabling a variety of stablecoins backed by high-quality liquid assets, including those issued overseas under close supervisory coordination, will be a major competitive and economic advantage.
This session aims to examine the benefits and challenges of local issuance and redemption requirements, and explore alternative regulatory frameworks for non-local issuance under strong supervisory controls. The goal is to establish progress towards a global framework that preserves stablecoin fungibility, accounts for local nuances, and ensures robust consumer and market protections while mitigating potential risks.
By convening regulators, stablecoin issuers, enterprise users, and compliance experts for the discussion, this session will seek to address:
- The rationale and impact of local issuance and redemption frameworks for stablecoins;
- Recommendations and risk assessment criteria for potential alternative issuance arrangements, such as dual issuance models, enabling non-local issuance of high-quality stablecoins, supervisory cooperation, or alternative regulatory frameworks; and
- Pathways for international regulatory coordination that can facilitate effective oversight while preserving the borderless advantages of stablecoins.
