Ripple has urged financial regulators to avoid sacrificing global fungibility of stablecoins for consumer protection, as it may undermine blockchain's benefits.
Regulatory Challenges for Stablecoin Issuers
In a January 30 report, Ripple stated that stablecoins are the heart of the new digital financial system due to their ability to facilitate low-cost transactions. It highlighted that laws like the EU's MiCA require stablecoin issuers to be authorized by local entities, which can challenge their operations.
Ripple's Case for Global Fungibility
Ripple argues that restrictions on local issuance may complicate redemption processes across jurisdictions, limiting blockchain's inherent advantages of cross-border transactions. The company emphasizes the fundamental value of stablecoins in delivering value globally at low costs.
Supporting Innovation Through Stablecoin Variety
Ripple calls for diverse stablecoin offerings, including those issued overseas, to foster innovation. It cites Singapore's approach, where overseas-issued stablecoins are treated as digital payment tokens, with minimal AML requirements.
Ripple highlights the importance of flexible stablecoin regulations to maintain their key advantages and efficiency in global transactions, promoting diversity for stable operations and user choice.
