Global authorities warned on Wednesday that major stablecoins must adhere to the same precautions as other means of payment, strengthening regulations over a bruised crypto market.

Stablecoins are cryptocurrencies that are meant to have a steady value compared to traditional currencies or commodities to minimize the volatility that makes bitcoin and other digital tokens unsuitable for most transactions.

On Wednesday, IOSCO, a global group for securities regulators, and a committee at the Bank for International Settlements (BIS), a forum for central banks, announced that they had formally endorsed ideas that were put out to the public consultation in October.

The new cryptocurrency guidelines impact stablecoins

The new guideline demonstrates when current payment sector standards should apply to big stablecoins, which they see as a significant step forward in applying "same risk, same regulation."

In a statement, Ashley Alder, head of IOSCO and CEO of Hong Kong's securities regulator, stated, "We anticipate the same level of resilience and strength in these characteristics in systemically important stablecoin arrangements."

The guidelines encompass risk management, governance, and transparency criteria.

Recent developments in the crypto-asset market

"Recent developments in the crypto-assets market have renewed authorities' urgency to address the potential dangers presented by crypto assets, including stablecoins in general," said Jon Cunliffe, chair of the BIS committee and deputy governor of the Bank of England.

TerraUSD stablecoin failed earlier this year, and crypto lender Voyager Digital declared bankruptcy earlier this month.

Bitcoin, the largest cryptocurrency, has fallen around 70% since its November high of $69,000.

Global regulators are set to go further in October when the Financial Stability Board, a global regulatory body that includes IOSCO, proposes "robust" rules for cryptocurrencies more generally.

Global watchdogs are playing catch up with the European Union which this month approved a groundbreaking law to regulate crypto markets, including stablecoins.

Britain is due to propose rules to regulate systemically important stablecoins this month as part of a draft law on reforming financial services and markets