Italy’s top banking authority has called for a “robust, risk-based” regulatory framework for stablecoins, which could help prevent a worst case scenario — a “run” on stablecoins.

The central bank’s recently released Markets, Infrastructures and Payment Systems report for June 2023 has called on regulators to apply the same financial conduct standards to stablecoin issuers in the industry.

#Bankitalia #26June Alessandra #Perrazzelli discussed about the evolving regulatory landscape for #DigitalAssets at @pointzeroforum Panel “State of Global Digital Asset Regulation: Navigating Opportunities in an Evolving Landscape”#PZF2023 #PointZeroForum @sif_sfi @elevandi pic.twitter.com/Jm0OBeifZh

— Banca d’Italia (@bancaditalia) June 26, 2023

The bank said the rise of cryptocurrencies, coupled with several “boom and bust cycles” in a largely unregulated environment has caused “significant consumer harm.”

Regulatory attention on stablecoin issuers in particular should be a priority because of its close connection to DeFi, the bank said:

“A robust, risk-based regulation of stablecoins ensuring the prevention of ‘runs’ on their issuers is a necessary condition to reduce the fragility of the DeFi ecosystem, given the prominent role of this asset class in decentralized finance.”

“It is

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Author: Brayden Lindrea

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