Everyone is debating stablecoin reserves. The bigger loophole may be the company around the issuer.
A BIS paper published yesterday notes that most rules restrict the issuing entity, not the full corporate group. A non-bank could keep issuance and reserves in one company, while lending, staking or custody sits in affiliates outside equivalent group-wide supervision.
Banks are supervised on a consolidated basis. Many crypto groups are not.
The next stablecoin risk may sit in an affiliate that technically never issued a coin.
Should large stablecoin groups face bank-style consolidated supervision, or would that only strengthen incumbents?
A BIS paper published yesterday notes that most rules restrict the issuing entity, not the full corporate group. A non-bank could keep issuance and reserves in one company, while lending, staking or custody sits in affiliates outside equivalent group-wide supervision.
Banks are supervised on a consolidated basis. Many crypto groups are not.
The next stablecoin risk may sit in an affiliate that technically never issued a coin.
Should large stablecoin groups face bank-style consolidated supervision, or would that only strengthen incumbents?
