The Financial Stability Board (FSB), an entity tasked with surveying the global financial ecosystem for systemic vulnerabilities, has announced a renewed focus on the intricacies posed by stablecoins within burgeoning and evolving economies. This resolution emerged from a conclave in Toronto, convened by the FSB’s plenary—the organization’s paramount decision-making ensemble—according to a communiqué released on Friday. Stablecoins, for the uninitiated, are digital currencies anchored to traditional assets like the dollar or gold.

The FSB has been instrumental in sculpting the contours of global cryptocurrency governance. Last year, in collaboration with the International Monetary Fund, it crafted a comprehensive policy dossier on cryptocurrencies, advocating against sweeping prohibitions as a strategy to mitigate associated risks. At the recent Toronto assembly, FSB delegates deliberated on domains within the crypto landscape that demand intensified scrutiny.

“Within emerging markets and developing economies (EMDEs), crypto-assets present unique hurdles for monetary policy and the regulation of capital flows,” the FSB articulated. “Members deliberated on the heightened levels of adoption and the inherent risks linked to global stablecoin systems in EMDEs. The FSB will embark on further endeavors to devise strategies to navigate these challenges.”

The regulation of stablecoins has been a contentious issue between the Group of 7 (G7) leading industrialized countries and the more expansive Group of 20 (G20). Despite the conclusion of a G7 summit in Italy last week, these regulatory divergences remain unresolved, underscoring the complexity and urgency of establishing a cohesive global stance on stablecoins.