We’ve developed these guiding principles to form part of our international consultation responses. Stablecoins have the potential to make payments faster, cheaper, more secure, and more efficient, enhancing both the retail and wholesale payments landscape. But for this to happen, policymakers must set clear parameters that encourage safe, responsible innovation in digital money and that empower consumers and builders alike. Stablecoin Standard has deliberated with leading Stablecoin issuers, members and subject matter experts to develop and support a set of guiding principles for the stablecoin industry – principles reflected in our responses to both the Bank of England and FCA discussion papers and our approach to stablecoin regulation globally:


  • Consumer Protection: Current consumer protections in traditional finance should be extended to stablecoin holders and relevant supporting institutions/organizations.


  • Financial Stability: Stablecoin regulations should maintain financial stability by mitigating systemic risks like issuer insolvency and by ensuring adequate safeguarding of funds and resiliency of operations.


  • Proportional & Risk-Based Approach: Stablecoin regulations should be applied proportionate to the size and risk profile of stablecoins, ensuring such regulation is fit for purpose and supports responsible innovation.


  • Regular Review & Adaptability: Government stakeholders must continuously review and adapt regulations to keep pace with market developments, emerging technologies, and evolving risks – understanding that this is a nascent Industry with limited resources that is expected to grow and evolve and needs to be nurtured and guided appropriately.


  • Complaint Management: Robust mechanisms for resolving consumer disputes with stablecoin issuers should be established.


  • White Papers: Every stablecoin issuer should have an explicit, templatized white paper explaining its product(s), policy on reserves, redeemability, risk management practices, liquidity management, reporting processes & governance, appropriateness, and other material items.


  • Transparency: Stablecoin issuers should provide clear and frequent disclosure of underlying assets, their location, and profile to relevant stakeholders (e.g. regulators, customers, counterparties, etc.), a summary key facts document & maintain records for an extended period of time.


  • Product Differentiation: Stablecoin products should be treated differently depending upon their underlying asset(s).


  • Code of Conduct Commitment & Good Character in Senior Leadership: Organizations should commit to adopt a code of conduct to support anti-fraud and duty of care principles.  Those individuals of good character should be able to lead issuing organizations at the most senior level.


Stablecoin Standard continues to support the development of clear regulatory frameworks for stablecoins that drive further innovation and competition and promote consumer protections. We welcome the opportunity to provide our feedback on regulatory proposals in the United Kingdom and elsewhere and to help policymakers ensure that payment systems are built for the digital age.