The Financial Stability Board has launched an investigation into the risks associated with stablecoin arrangements in emerging and developing economies. The decision was made at a meeting of the organization's plenary in Toronto, where members identified areas in the crypto sector that require further attention. The FSB has been instrumental in shaping global crypto policy and has warned against implementing blanket bans to mitigate risks associated with the sector.

The use of crypto-assets in emerging market and developing economies poses significant challenges for monetary policy and capital flow management. Members of the FSB discussed the challenges posed by the higher levels of adoption and risks of global stablecoin arrangements in these economies. The FSB will conduct further research to determine how these challenges can be addressed.

The regulation of stablecoins has been a contentious issue between the G7 and G20 nations. The G7 has pushed for tighter norms and signaled its commitment to implementing the FSB's norms for regulating crypto assets. On the other hand, the G20 has sought stricter measures, with some members calling for prohibitions on stablecoins.

The FSB's investigation into stablecoin risks is a significant step towards addressing the challenges posed by crypto-assets in emerging and developing economies. The organization's findings will be crucial in shaping global crypto policy and ensuring financial stability in these economies.

The FSB's probe into stablecoin risks is a testament to the organization's commitment to ensuring financial stability in the global economy. The investigation will provide valuable insights into the challenges posed by crypto-assets and inform policy decisions that promote financial stability and growth.