Financial Stability Board (FSB) says it is working on a “robust” regulatory framework for crypto assets and will report its recommendations to G20 finance ministers and central bank governors in October.
FSB will present a robust crypto regulatory framework to the G20 in October
The Financial Stability Board (FSB), the international body that monitors and makes recommendations on the global financial system, issued astatementMonday on “International Regulation and Supervision of Crypto Asset Activities.”
The G20 oversight body is committed to promoting “international consistency in regulatory and supervisory approaches among national authorities and international standard setters as they work to develop risk-based, technology-neutral policies for a wide range of crypto assets based on the principles of ‘same, activity, same risk, same regulation’ . and stated that it is committed to doing so.”
The FSB noted the rapid evolution of crypto assets, including stablecoins, and explained that recent disruptions in crypto markets “could spill over into important parts of traditional finance, such as short-term funding markets.” The organization elaborated.
An effective regulatory framework must ensure that crypto asset activities that pose similar risks to traditional financial activities are subject to the same regulatory consequences, while taking into account the novel features of crypto assets and leveraging the potential benefits of the technology behind them.
“Crypto assets and markets must be subject to effective regulation and oversight commensurate with the risks they pose, at national and international levels,” the FSB elaborated.
In addition, crypto service providers “must at all times ensure compliance with existing legal obligations in the jurisdictions in which they operate,” the financial stability watchdog elaborates.
The statement continues.
The FSB is working to ensure that crypto assets are subject to robust regulation and oversight.
“The FSB will report to G20 finance ministers and central bank governors in October on its regulatory and supervisory approach to stablecoins and other crypto assets.
In February, the FSB released a report examining the risks that crypto poses to financial stability. The report states that “the crypto asset market is evolving rapidly and may reach a point where it poses a threat to global financial stability due to its increasing size, structural vulnerabilities, and interconnectedness with the traditional financial system.” He noted.
Last week, the U.S. Treasury Department submitted to President Joe Biden a cryptographic framework for international engagement as directed in an executive order issued in March.
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