Bank of Italy Advocates for Stricter Oversight of Global Multi-Issuance Stablecoins

The Bank of Italy has urged the implementation of more stringent regulatory measures concerning global multi-issuance stablecoins, citing potential hazards to financial stability. In a recent report, the central bank emphasized the need for these currencies to be subjected to close scrutiny, given their expanding prevalence and possible impact on the traditional financial system. The report noted that stablecoins, which aim to maintain a steady value pegged to a reserve asset like the U.S. dollar or Euro, could destabilize financial markets if not properly regulated. The Bank of Italy called upon international regulators to collaborate on the development of global standards for stablecoins, with a focus on transparency, robust capital requirements, and effective risk management. Furthermore, the report highlighted the importance of investor protection by providing clear and accurate information about the risks associated with stablecoins. The central bank stressed that effective regulation is essential to ensure that stablecoins can contribute to financial innovation without jeopardizing financial stability.