Following reviews conducted during 2023, the Committee proposes to update the requirements relating to banks’ exposures to stablecoins.

The proposals flesh out the criteria on the composition of the reserve assets that back stablecoins, covering issues such as the credit quality, maturity and liquidity of the reserve assets. The requirements determine whether the stablecoins to which banks’ may be exposed will be eligible for inclusion in the Group 1b category of cryptoassets, and thus benefit from a preferential regulatory treatment.

Under the proposals banks would also be required to perform due diligence to ensure that they have an adequate understanding of the stabilisation mechanisms of stablecoins to which they are exposed and how effective they are. As part of this due diligence, banks would be required to conduct statistical or other tests demonstrating that the stablecoin maintains a stable relationship in comparison to the reference asset. The Committee welcomes comments on the proposed amendments to the cryptoasset standard, which should be submitted here by 28 March 2024.