Coinbase is Against Basel Committee’s Requirements for Stablecoins

The Basel Committee on Banking Supervision has expressed a desire to limit banks’ use of “stablecoins” through its requirements.

In a response letter to the organization’s consultation document, Coinbase pointed out that many proposals are not based on the actual risks of stablecoins to banks but instead reflect other policy objectives not typically covered in capital requirements.

The consultation document’s purpose is to determine whether “stablecoins” should be classified in the “Group 1b” category, which entails preferential regulatory treatment.

To qualify, stablecoins must meet certain standards, including low volatility and sufficient liquidity. The committee has suggested that banks conduct due diligence to fully understand how stablecoins maintain a stable exchange rate.

However, Circle, the issuer of USDC stablecoin, has criticized the committee’s assessment of public blockchains and believes that more work needs to be done.