The Ministry of Finance (MoF) participated in the virtual meeting of the Financial Stability Board Regional Consultative Group for the Middle East and North Africa (FSB RCG MENA). The meeting discussed the latest repercussions of COVID-19 on financial stability, and any medium or long-term threats to regional financial stability that may arise from the pandemic and its economic impacts.

H.E. Abdulhamid Saeed, Governor of the Central Bank of the UAE, and H.E. Younis Haji Al Khoori, Undersecretary of MoF, represented the UAE at the meeting, which was chaired by of Dr. Ahmed Abdulkarim Alkholifey, Governor of the Saudi Arabian Monetary Authority (SAMA), and H.E. Rasheed Mohammed Al Maraj, Governor of the Central Bank of Bahrain. Current members of the FSB RCG MENA includes financial and regulatory authorities from the Kingdom of Saudi Arabia, the United Arab Emirates, Algeria, Bahrain, Egypt, Jordan, Kuwait, Lebanon, Morocco, Oman, Qatar, Tunisia and Turkey.

During the meeting, H.E. Younis Haji Al Khoori presented the key findings and recommendations addressed in the white paper that was developed by the UAE MoF for the G20 on the design principles of a monitoring framework to ensure the integrity of the overall financial system. H.E. reiterated the importance of proactively dealing with the rapid spread of digital currencies and their potential effects on the global financial system. H.E. also noted the importance of monitoring and, where required, addressing the integrity risks arising from the deployment of stablecoins.

H.E. said: “The increased deployment of stablecoins in an unregulated environment can jeopardise monetary policies’ effectiveness, which correlates with the challenge of maintaining fairness and transparency of price formation in financial markets. It is therefore essentials that governments and International Organisations to collaborate on the development of an effective framework that will guide policy efforts to regulate and monitor stablecoin arrangements.”

The meeting focused on providing RCG members with the opportunity to discuss the regulatory, supervisory, and oversight challenges raised by stablecoin arrangements based on the FSB’s latest Consultative document “Addressing the regulatory, supervisory and oversight challenges raised by “global stablecoin” arrangements.”

The attendees agreed to continue the discussions with the FSB on this emerging topic, and to explore ways to integrate the work on the proposed monitoring framework into the G20 Finance Track sessions for 2021 and beyond.