The emergence of global, or large-scale, stablecoins could represent systemic risks, particularly if their issuance and use expand without an adequate and internationally consistent regulatory framework.
Bank of Mexico
Stablecoins are virtual assets designed to maintain their value by being linked to a legal tender; The objective is also to mitigate the high volatility that characterizes virtual assets and the low liquidity.
The stablecoin market has grown in recent years: while in 2021 the market was approximately $149 billion, by November of this year the market increased to more than $300 billion.
The most used stablecoins are Tether (USDT) and the dollar stablecoin (USDC), which together account for 86% of the stablecoin market.
With this accelerated growth and adoption, Banxico identifies that countries and international organizations have accelerated their regulatory frameworks that provide legal certainty. Among the most relevant initiatives are the Regulation of Cryptoasset Markets (MiCA) in the European Union and the Act to Guide and Establish National Innovation for Stablecoins in the United States (GENIUS).
“Although both share common objectives and present similarities, they have different nuances, which could lead to asymmetries and encourage regulatory arbitrage,” the report highlighted.
Furthermore, in 2023, the Federal Security Service of Russia published two complementary frameworks that include high-level recommendations for the regulation and supervision of crypto-asset activities; and other equivalents for global stablecoins.
For Banxico, stablecoins present vulnerabilities comparable to those of money market funds, particularly in contexts of loss of confidence or episodes of tension in financial markets.
