REGULATORY CHALLENGES OF STABLE COINS: IMPLICATIONS IN THE CONTEXT OF FINANCIAL STABILITY
Abstract
The increasing growth of stablecoins has opened great opportunities for new financial originations while adding considerable challenges for regulation and supervision of finances. Among the cryptocurrency market and digital services stablecoins maintain a steady value in connection to a reference asset, most frequently a fiat currency. The increasing growth of stable coins and its implementation in businesses and financial institutions have raised concerns with liquidity, redemption, de-pegging, reserve management, operational risks and systemic effects. The global reach of stablecoin further complicates regulatory actions and open prospects for regulatory speculations. This study focuses on the main regulatory and supervisory issues connected with stablecoin and its potential implications for financial stability.