Stablecoin Standard Announces Operational, Transparency, and Product Standards for Stablecoins Globally
Recently appointed Global Policy Lead, Beth Haddock, unveiled their initial global standards for operational resilience, transparency, and issuer product commitments at their Annual Flagship Event this week
Now the 28 members of the industry across key jurisdictions will review and work together to finalize, endorse, and ultimately adhere to the standards they believe will advance digital money adoption through stablecoins
SINGAPORE – September 17, 2024 – Stablecoin Standard, the industry body for stablecoin issuers globally, today announced a new set of global operational, transparency, and product standards for stablecoin issuers to reflect the best of current and proposed regulations, aiming for adoption by a majority of the members and the public Q4 2025.
The Standards were announced to its members in attendance which included representatives from stablecoin issuers, like GMO Z, Archblock, IDA, and Novatti among other industry partners operating across key jurisdictions during Stablecoin Standard’s Annual Flagship Event during Token2049 Singapore. The Stablecoin Standard Working group, with help from external reviewers and experts, created the below high-level standards that are both general and actionable, while being sensitive to the innovation in the market:
Stablecoin Definition: A stablecoin is defined as a regulated fiat-backed or e-money token issued on a blockchain, regulated as required, and backed by reserves at a 1:1 ratio in high-quality liquid assets (HQLA).
Full Collateralisation: Issuers must maintain fully collateralized reserves in high-quality liquid assets with minimal market, credit, and concentration risks.
Risk Management: Reserve assets must be valued daily on a marked-to-market basis, covering at least 100% of the par value of all outstanding stablecoins.
Legal Separation of Reserves: Reserves must be legally separated and titled for the benefit of stablecoin holders, and held by credible financial institutions.
Restriction of Re-hypothecation: Re-hypothecation of reserve assets is restricted, and reserves must be managed to ensure ready liquidity and support timely fiat redemption.
Transparency in Reserves: Issuers must commit to monthly disclosures of reserve assets, verified by a registered public accounting firm, and conduct annual financial audits of reserves.
Resiliency and Insolvency Management: Issuers must establish a resiliency and insolvency management program, including liquidity risk management practices and periodic stress testing.
Governance and Risk Management: Issuers are required to adopt a transparent governance and risk management approach, including publishing monthly reports on stablecoin circulation and reserve composition.
Ethics and Consumer Protection: Issuers must uphold ethical standards, maintain a professional team, and provide clear product and risk disclosures covering pricing, fees, redemption policy, and reserves management.
Financial Crime Prevention: Issuers must maintain effective programs for AML, sanctions, CTF measures, cybersecurity and other financial crime prevention, along with a regulatory strategy for compliance with applicable laws and timely reporting.
“As stablecoins continue to gain traction as one of crypto’s leading use cases, we’re excited to bring together some of the world's leading issuers and users of stablecoins to align on standards that will help advance this industry globally,” said Beth Haddock, Global Policy Lead at Stablecoin Standard. “As we look to further bring crypto into the larger financial ecosystem, we have to be sure that both the industry and regulatory considerations are all taken into account.”
Ramy Soliman, Co-Founder of Stablecoin Standard, concluded, “While this industry is still young and full of plenty of innovation it’s important that we all come together to set minimum standards for what is truly novel enhancement to the digital transfer of currency. We’re proud that we were able to work with some of the brightest legal and technical minds in the space to create standards that both stablecoin issuers and other industry participants feel proud to stand behind.”
About Stablecoin Standard
Stablecoin Standard (SCS) is the industry body focused on setting operational, transparency, and product related standards for stablecoins. The SCS plans to achieve industry wide standards by sharing international best practices, business development use cases, forming industry led working groups defining what a high-quality liquid stablecoin should look like, and engaging with policymakers domestically & internationally. The SCS ecosystem consists of almost 30 advisory board members, industry partners and issuers that offer digital currencies in global jurisdictions such as the US, EU, Singapore, Australia, and Turkey - among others.
You can follow the Stablecoin Standard on LinkedIn and X and to learn more, please visit: https://stablecoinstandard.com/