Global financial watchdog FSB proposes rules to regulate crypto in October
FSB will make recommendations concerning stablecoin and crypto regulations to the G-20
By Shashank Bhardwaj
The Financial Stability Board (FSB) is planning to present recommendations regarding crypto regulations to the G-20 in October. FSB is a Basel, Switzerland-based international authority that performs the task of monitoring financial systems and proposing rules for financial stability worldwide. It reports to 20 of the world’s largest economies.
The recommendations to be proposed in October will revolve around crypto and stablecoin regulations. The issued statement referred to the recent turmoil in the crypto market while highlighting the structural vulnerabilities inherent in the crypto market and the increasing correlation of the crypto market with the traditional financial market. "The FSB is working to ensure that crypto-assets are subject to robust regulation and supervision," the statement said.
The October recommendations will include a public consultation report sent to the G-20 for reviewing the high-level recommendations for the regulation, supervision and oversight of stablecoins and for promoting international consistency of regulatory and supervisory approaches to other crypto-assets. The rules so proposed may include provisions to extend the existing frameworks, and close the loopholes before the recommendations are finally implemented.
The recent developments, including FSB’s announcement of crypto policy regulations, come in the wake of the current market downturn and the recent crash of the Terra-UST platform. In February, FSB published a report that warned that the rapid growth of the crypto market wasn’t the only reason the unregulated sector could hamper financial stability globally. Klaas Knot, FSB Chair, confirmed that the watchdog was taking every possible action and was aptly placed to set up a coherent regulatory framework for digital assets.
In June, EU policymakers passed a landmark bill to put crypto issuers and service providers within the regulatory perimeter. The bill emphasised stablecoins which are essentially pegged in a 1:1 ratio to assets and sovereign currencies like the Dollar.
The writer is the founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash
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