The G20’s Financial Stability Board (FSB), a global financial authority, has published a report for an international level of regulation for the cryptocurrency market. The FSB says that the crypto market is evolving fast and that it has come to the point where more focused regulation is necessary. The global watchdog has posted a list of questions and is inviting public comments until December 15.
Key Takeaways
- The Financial Stability Board (FSB) has published a report on a proposed framework for the cryptocurrency market.
- The FSB is seeking public comments until December 15 and has published a set of questions to that end.
- The FSB wants to consider the risks and challenges of developing regulations, policy initiatives at jurisdictional and international levels, and a possible approach to regulation.
- The EU also recently passed its MiCA bill onto the final vote.
FSB Sees Sees Crypto as a Threaten to Financial Stability
The two-day meeting of the G20 began on October 12 in Washington, focusing on cryptocurrency markets, especially volatile stablecoins. The FSB believes that the crypto market could represent a threat to global financial stability due to its “scale, structural vulnerabilities, and increasing interconnectedness with the traditional financial system.”
Speaking of a broad regulatory framework for the crypto asset class, the global watchdog says, “An effective regulatory framework must ensure that crypto-asset activities are subject to comprehensive regulation, commensurate to the risks they pose, while harnessing potential benefits of the technology behind them.”
The report focuses on the key issues and challenges of developing comprehensive regulation and policy initiatives at the jurisdictional and international levels. It also considers a possible approach to establishing a regulatory framework.
It is also seeking public comments on the report, asking all interested stakeholders to participate. This includes a set of questions that covers the matter of global stablecoins. This will be open until December 15.
Global Crypto Regulation Looming
The FSB’s report comes after it announced its plans to tackle regulating the crypto market in July 2022, in which it talked about the need to address stablecoins. It also published a report in February 2022 about how crypto could affect global financial stability.
The FSB reports to the G20 nations, and any suggestions it makes could have an enormous impact on the crypto market. The European Union is already close to finalizing its MiCA bill, which by itself is a huge change for the crypto market, as it addresses stablecoins and the prevention of money laundering.
The report by the FSB indicates that global and national authorities are moving closer to regulating the crypto market. Authorities have time and again said that the crypto market needs international coordination to rein in, and 2022 is shaping up to be a landmark year in terms of crypto regulation.
The Bottom Line
The crypto market now has a basic idea of where the FSB wants to focus on the matter of crypto regulation. By December 2022, the market will have two major developments taking place: a potential detailing of the FSB’s suggestions for regulation and the passing of the MiCA bill by the European Union. It may encourage crypto regulation in other countries as well.