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- 1 The global Financial Stability Board demanded for more measures to avoid blow-ups similar to FTX: Reuters.
- 2 The FSB is the organization that groups the regulators, central banks, and treasury officials from G20 nations.
Reuters reported on November 28, that the global Financial Stability Board demanded for more measures to avoid blow-ups similar to FTX, which shook the global financial ecosystem briefly, and hurt the crypto industry.
The FSB is the organization that groups the regulators, central banks, and treasury officials from G20 nations.
The board stated that the unprecedented FTX collapse that occurred in 2022, had stirred financial market, and that the failure highlighted how multiple functions of crypto firms are triggering the vulnerabilities.
The vulnerabilities found in the crypto market are similar to financial markets such as leveraging, liquidity mismatches, technology, and operation vulnerabilities.
Vulnerabilities become worse due to the scarcity of effective controls, lack of disclosure, and conflicts of interest, as per the FSB. The evidence stated by the board highlights the threat to larger financial stability, and the economy is limited at present.
Multifunction crypto-asset intermediaries (MCIs) are a critical component of the #cryptoasset ecosystem as their business models have expanded and continue to evolve. Our report looks at MCI vulnerabilities and risks they may pose to #FinancialStability
— The FSB (@FinStbBoard) November 28, 2023
👉 https://t.co/iA9O6X2lBs pic.twitter.com/s8ESzJmMEn
Both global bodies of securities watchdogs FSB & IOSCO have already published a high-level recommendation for supervising crypto activities.
Earlier, on July 17, the FSB unveiled proposed guidelines for a global regulatory framework for the crypto industry.
The proposed cooperation wishes to guarantee that sturdy regulations should govern digital asset activities. It also expects to facilitate an oversight that would analyze the financial stability risk the industry carries along with helping the forthcoming innovation in the sector.
The G20 agency feels that the recommendations provided in the report should be sufficient for the SSBs to make detailed structures robust enough to tackle the industry’s issues in their specific jurisdictions.
As part of its continuous examination of vulnerabilities in the financial system, the FSB produced a monitoring framework in July 2018 that outlined the transmission channels the FSB will employ to monitor the implications of the crypto-asset markets for financial stability.
An Assessment of Risks to Financial Stability from Crypto-assets was released in February 2022 in response, which looked at changes and related vulnerabilities in the markets for crypto-assets, including stablecoins and so-called decentralized financing (DeFi). DeFi is quite similar to traditional finance in terms of its functions or the risks it is exposed to.
Crypto Market Overview
In the past 24 hours, the global crypto market cap grew 2.44% and when writing, it was $1.43 Trillion. However the total volume of DeFi is $5.02 Billion, it surged more than 9.09%. At press time, Bitcoin was trading at $38,256.60 with a weekly surge of 4.76% in price. BTC trading volume grew 45.93% in the past 24 hours.
Disclaimer
The views and opinions stated by the author or any people named in this article are for informational ideas only and do not establish financial, investment, or other advice. Investing in or trading crypto or stock comes with a risk of financial loss.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.