March 25, 2020 An IOSCO report claims that global stablecoins may have to comply with securities legislation.

A report from The International Organization of Securities Commissions (IOSCO) on Monday detailed how global stablecoin initiatives could be treated as securities by regulators. Although the body stated that projects must be judged on a case-by-case basis, with the demonstration of a specific example, it detailed how such a project may be a security. IOSCO’s hypothetical stablecoin was collateralized by a collection of global currencies, issued and transacted on a private blockchain and managed by the governing body of a private company. This example bears a particular resemblance to the Libra stablecoin project that has attracted negative worldwide attention from regulators and legislators. In such an example, the IOSCO warned that if it became popular, such a stablecoin could become “systemically important” and the project could become a financial market infrastructure (FMI), forcing it to comply with the Bank of International Settlements’ FMI principles. In addition, any of the project’s reserves, interests or obligations could constitute securities products.