Stablecoins broadly comprise a digital financial asset that purports, by one means or another[9], to maintain a stable value, a ledger system, usually a distributed ledger, for recording and transferring ownership. These are supported by exchanges for trading the coins and custody arrangements for storing them. At present, they are issued by a variety of non-bank entities. So far their use has been confined to facilitating trading and other transactions in the world of crypto assets but there are proposals to introduce them for other payment purposes in the economy and for cross border use in competition with money issued by commercial banks and conventional payment systems[10]. Stablecoins offer the possibility of greater efficiency and functionality in payments. But they currently sit outside most of the regulated framework and it is extremely unlikely that any of the current offerings would meet the standards for robustness and uniformity we currently apply both to commercial bank money and to the existing payment systems that transfer commercial bank money between the parties to a transaction. The Financial Services and Markets Bill will give the Bank powers to regulate operators of systemic payment systems and systemic service providers using “digital settlement assets”, including stablecoins that are used, or are likely to be used, for payments, at systemic scale in the UK. It will also give the FCA powers to regulate the issuance and custody of fiatreferenced stablecoins for conduct and market integrity.
2/5  BIS central bankers' speeches  Stage 2: Normalization The second stage of normalization followed lift-off and has involved two processes: 1) raising the federal funds target closer to more normal levels, reflecting the ongoing improvement in the economy, and 2) gradually reducing the Fed’s balance sheet as we work to unwind the asset purchase policies put in place during the crisis. Let’s start with interest rate normalization. Since lift-off, we’ve raised interest rates as the economy moved toward maximum employment and our 2 percent longer-run inflation objective. We continued this process with our most recent rate increase this week.4 Throughout, we’ve repeatedly stressed that we foresaw this to be a process of gradual normalization, reflecting the balancing of risks to reaching our goals. In particular, downside risks to the achievement of our employment and inflation goals amid very low interest rates were compelling arguments for a cautious and relatively predictable approach to policy. This approach proved its worth: The economy continued to expand at a healthy pace even as the Fed raised rates numerous times. I’ll now turn briefly to the normalization of the balance sheet. We began this process about a year ago.