The European Association of CCP Clearing Houses (EACH) published its response to the CPMI-IOSCO consultative report “Application of the Principles for Financial Market Infrastructures to stablecoin arrangements”
Overall, EACH supports the guidance included in the report. In its reply, EACH noted said the focus should be the trend of “Decentralized Finance” (DeFi) emerging with financial products built on DLT networks, often on public blockchains, suggesting that these new environments support investor protection by applying the necessary measures (e.g. KYC, AML, Market Oversight).
EACH also requested a clarification on whether the proposed guidance applies to financial market infrastructures that in the future may want to implement Principle 8 of the PFMI on settlement finality in a DLT context. Principle 8 states that “An FMI should provide clear and certain final settlement, at a minimum by the end of the value date. Where necessary or preferable, an FMI should provide final settlement intraday or in real time”.