Golden bitcoin and handcuffs. Regulation and fraud of cryptocurrencies.

Financial Stability Board urges stricter global regulation

Posted on

The Financial Stability Board (FSB) published on Monday a global regulatory framework for crypto-asset activities to provide a global regulatory and supervisory foundation for crypto. The recommendations made to the G20 – the 20 leading economies of the world – are based upon the principle of “same activity, same risk, same regulation.”

See related article: India working with IMF, FSB on crypto regulations, says economic affairs secretary

Fast facts

  • The FSB said it has strengthened recommendations primarily in three areas, to ensure adequate safeguarding of client assets, addressing risks associated with conflicts of interest, and strengthening cross-border cooperation.
  • FSB said the recommendations focus on addressing risks to financial stability and do not cover all specific risk categories related to crypto-asset activities. Central Bank Digital Currencies (CBDCs) are not subject to these recommendations.
  • The recommendations state that authorities should ensure they have the powers to address the risks posed by crypto service providers to evade regulation and oversight by operating in foreign jurisdictions. 
  • “The events of the past year have highlighted the intrinsic volatility and structural vulnerabilities of crypto-assets and related players. They have also illustrated that the failure of a key service provider (FTX) in the crypto-asset ecosystem can quickly transmit risks to other parts of that ecosystem,” the FSB said in its statement
  • The recommendations are addressed to financial regulatory, supervisory and oversight authorities at a jurisdictional level, FSB said. 
  • The final recommendations published on Monday took into account feedback from a public consultation announced in October last year.
  • The FSB is chaired by Klaas Knot, president of De Nederlandsche Bank. The FSB Secretariat is located in Basel, Switzerland, and hosted by the Bank for International Settlements. 
  • The FSB will review the global implementation of its recommendations by the end of 2025.

See related article: India’s finance minister urges G20 nations to come on board to regulate crypto

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *