The Bank for International Settlements issues paper on the regulation of digital payment services and e-money

▤ Summary

To realize its mission, the BIS provides a platform for responsible innovation and knowledge-sharing and conducts in-depth analyses on core financial stability policy issues. The paper was informed by responses to a survey administered in early 2021 by the Committee on Payments and Market Infrastructures (CMPI)[1] to 75 jurisdictions[2], which was subsequently supplemented by a desktop review of public documents issued by selected authorities. Whereas rules applicable, for instance, to licensing/registration, minimum capital, funds safeguarding, security and interoperability were generally applied differently, depending on the nature of the payment service. [16] That said, they remark that the introduction of stablecoins as a variant of cryptoassets may evolve over time to become “a convenient means of payment for e-commerce (particularly when integrated into online platforms) and peer-to-peer and micro-payments”[17] with the potential of becoming systemically important, if globally adopted. [16] Extreme price volatility, restricted scalability, limited throughput of transactions, lack of payment finality, and crypto-mining’s significant carbon footprint.

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