Financial Stability Board Will Make Recommendations To G-20 Regulators On Crypto Assets In October
- Today, the Financial Stability Board (FSB) stated the regulation and supervision of operations in the global crypto market following the current downturn in the crypto market.
The Financial Stability Board (FSB) issued an official statement on Monday regarding its proposed suggestions for regulating cryptos in October. The FSB is the global body responsible for monitoring financial infrastructures and suggesting policies that would prevent financial crises worldwide. The Basel-based board reports to the G-20, a group of the world’s top economies.
Financial Stability Board on Crypto
The FSB’s recommendations would include policies that cover crypto assets and stablecoins. According to the statement, the FSB aims to ensure a robust regulation and supervision of crypto assets. It further said that the current crisis in the crypto sector emphasizes the relationship between the crypto market and the traditional finance markets.
It also exposes the natural volatility and structural weaknesses of the crypto market. The FSB states that there is a need for a regulatory framework to harness these crypto-asset features. The framework would also tap into the benefits of the technology used in building these crypto assets. However, it adds that they must be subject to similar regulatory outcomes to the traditional finance system.
The FSB restates that crypto-assets can’t operate in a regulation-free environment. The global financial watchdog also adds that crypto market participants must be aware that most digital assets are in non-compliance with existing financial protection for investors.
Notably, the FSB is taking accelerated action over the regulation of cryptos following the recent crash of the Terra network, including its stablecoin (the TerraUSD).
Also, the crypto bear market that has persisted since the beginning of the year gives the FSB another reason to recommend and implement new crypto regulations. Last month, European authorities finalized their discussions on the policies pertaining to crypto service providers and issuers.
They also placed significant emphasis on policies for stablecoins. Stablecoins are cryptos pegged to the fiat on a 1:1 basis. Like the European Union, the FSB also wants crypto asset providers to comply with crypto regulations as it is obtainable in the region where they operate.
Completing A Huge Task
FSB Chair, Klaas Knot, warned that the lack of regulation of the crypto market could destabilize global financial systems. Knot issued the warning in an FSB report published earlier in the year. Two months ago, Knot also said the FSB is in the best position to lead a uniform regulatory framework for global digital assets.
The FSB has almost completed its public consultation report titled “high-level recommendations for the supervision, regulation, and oversight of stablecoins.”
Notably, it plans to submit its information to the G-20 by October this year. Part of its recommendations would include the expansion of current frameworks to bridge loopholes.
It would also suggest the best ways to implement its suggested policies.
The FSB also intends to submit a similar report for the governance of other crypto assets. However, it wasn’t specific about these other crypto assets.
Rebecca is a Senior Staff Writer at BitcoinWisdom, working hard to bring you the latest breaking news in the cryptocurrency market. In the words of Elon Musk “Buy stock in several companies that make products & services that *you* believe in. Only sell if you think their products & services are trending worse. Don’t panic when the market does. This will serve you well in the long-term.”
