Spotlight On Stablecoins And CBDCs: Part 2

This is the second installment in a series exploring stablecoins and central bank digital currencies (CBDCs).  In the first installment, we discussed fundamental similarities and differences between these two novel financial instruments.

In this article, we focus on stablecoins – the risks they pose and the regulatory frameworks proposed by governments and regulatory bodies to address such risks.

The global financial system recognizes that cryptocurrencies can no longer be dismissed as fad. As such, regulators are trying to enact legislative frameworks that protect investors. In developing their proposed frameworks, regulators contend with a number of serious challenges posed by the rise of stablecoins.