Breaking: šØ $TUSD , $USDC Face Danger As BIS to Permit Only Permissioned Stablecoins
All stablecoins issued on the permissionless blockchains such as Tetherās USDT and Circleās USDC face the danger of major regulatory wrath ahead as the Bank of International Settlements (BIS) has issued new guidance tightening its criteria over permissionless stablecoins.
BIS Targets Stablecoins like USDT and others
On Wednesday, July 17, the Basel Committee on Banking Supervision published its final disclosure report for the banksā crypto-asset exposure. As a result, banks will need to disclose qualitative and quantitative reports on their crypto-related activities and the liquidity requirements to maintain stability.
It has also tightened up the criteria for certain stablecoins that will receive a preferential āGroup 1bā regulatory treatment.
This means that there could be severe restrictions on the functioning of permissionless stablecoins such as Tetherās USDT, Cricleās USDC, and others. Interestingly, this development comes on the same day when the Hong Kong Monetary Authority released consultation papers on a licensing regime for stablecoin issuers.
Crypto Industry Veterans Lash Out At BIS
Caitlin Long, CEO of Custodian Bank, expressed her dismay over the recent decision by BIS stating that they have now excluded stablecoins issued on permissionless blockchains from use by banks while favoring permissioned stablecoins instead.
She further commented that the United States is likely to disregard this development, stating, āThe US will almost certainly just ignore this. Itās a shame thoāBIS was leading the US on crypto but just went backward.ā
However, the new guidance from the Bank for International Settlements (BIS) encourages banks to use only permissionless stablecoins, such as JPMorganās JPMCoin. Interestingly, banking firm State Street is reportedly planning for a stablecoin launch. This could be another major blow to permissionless stablecoins like USDT.
