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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 to Present Robust Crypto Regulatory Framework to G20 in October
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:
An effective regulatory framework must ensure that crypto-asset activities posing risks similar to traditional financial activities are subject to the same regulatory outcomes, while taking account of novel features of crypto-assets and harnessing potential benefits of the technology behind them.
“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.
The statement continues:
The FSB is working to ensure that crypto-assets are subject to robust regulation and supervision.
“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.
In February, the FSB published a report examining the risks crypto poses 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.”
Last week, the U.S. Treasury Department submitted a crypto framework for international engagement to President Joe Biden as directed in the executive order issued back in March.