The Financial Stability Board (FSB) says it is working on a “robust” regulatory framework for crypto assets and will report its recommendations to the G20 finance ministers and central bank governors in October.
FSB will present a robust crypto regulatory framework to G20 at the October meeting
The Financial Stability Board (FSB), an international body that monitors and makes recommendations about the global financial system, released a statement Monday on the “international regulation and supervision of crypto asset activities.”
The G20 watchdog stated that it is committed to promoting “international consistency of regulatory and supervisory approaches amongst national authorities and international standard-setters as they work towards developing risk-based, technology-neutral policy for the wide spectrum of crypto-assets, grounded in the principle of ‘same, activity, same risk, same regulation.’”
Noting that crypto assets, including stablecoins, are fast evolving, the FSB explained that the recent turmoil in crypto markets “may have spill-over effects on important parts of traditional finance such as short-term funding markets.” The organization detailed:
Effective regulation must guarantee that crypto-asset transactions that pose similar risk to traditional financial activity are subject to the same regulatory outcome. However, it should take account of new characteristics of crypto-assets as well as the potential benefits of their technology.
“Crypto-assets and markets must be subject to effective regulation and oversight commensurate to the risks they pose, both at the domestic and international level,” the FSB elaborated.
Furthermore, crypto service providers “must at all times ensure compliance with existing legal obligations in the jurisdictions in which they operate,” the financial stability watchdog detailed.
This statement goes on:
The FSB will ensure strong supervision and regulation of crypto-assets.
“The FSB will report to the G20 finance ministers and central bank governors in October on regulatory and supervisory approaches to stablecoins and other crypto-assets,” the watchdog concluded.
A February report by the FSB examined crypto’s potential threats to financial stability. The report noted that “Crypto-asset markets are fast evolving and could reach a point where they represent a threat to global financial stability due to their scale, structural vulnerabilities and increasing interconnectedness with the traditional financial system.”
The U.S. Treasury Department sent a Crypto Framework for International Engagement to President Joe Biden last Wednesday, as required by an executive order from March.
How do you feel about the FSB’s efforts to make sure that cryptocurrency assets are subjected to strong regulation and supervision. Comment below.
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