The World Economic Forum, or WEF, has published a resource suite aimed at informing lawmakers and individuals in the private sector about digital assets including central bank digital currencies and stablecoins.
On Nov. 19, the WEF announced its Digital Currency Governance Consortium White Paper Series, a resource suite created by 85 organizations from 40 countries around the world. The publication contains 8 separate white papers exploring topics including the impact of lawmakers regulating stablecoins and central bank digital currencies, or CBDCs, as well as informing them about the risks, benefits, and alternatives. In addition, the suite addresses regulatory gaps for digital assets and their potential uses in further financial inclusion and cross-border aid.
“Investor and consumer protections continue to be imperative for cryptocurrency and stablecoins,” said Anne Richards, CEO of Fidelity International, one of the companies that contributed to the publication. “The Digital Currency Governance Consortium focuses on this important topic, making a valuable contribution in mapping consumer risks and regulatory gaps to inform future policy-making.”
According to the WEF, different world governments could benefit from collaborations on CBDCs and stablecoins in addressing the prevention of illicit activity, consumer protection, and cross-border arrangements regarding CBDCs where regulatory gaps might exist. The organization’s white paper on addressing regulatory gaps specifically cites a potential lack of cybersecurity having the ability to create a “full-blown systemic financial crisis” should a digital currency be compromised by a bug or other exploit.
The framework the WEF proposes to prevent and address gaps and inconsistencies in stablecoins and CBDCs involves having agencies form a task force composed of senior leaders focused on certain risk areas and those involved in setting some of the current standards on digital assets. According to the white paper, this approach could “lay the foundation for sustainable innovation, align regulatory frameworks and foster greater levels of international collaboration.”
The new resource suite follows the WEF releasing guidance for regulators and policy-makers concerning regulations in decentralized finance in June. The organization said at the time the publication offered a foundational basis for examining critical factors concerning DeFi regulations.