G20 Watchdog Announces 'Rigorous' Global Crypto Regulation Coming in October

12-Jul-2022 By: Anubhav Tulsyan

G20 Watchdog Announces 'Rigorous' Global Crypto Regulation Coming in October

The G20 finance ministers and central bank governors will hear the Financial Stability Board's (FSB) proposals in October as it develops a "strong" regulatory framework for crypto assets.

The Financial Stability Board (FSB), a worldwide organization that keeps tabs on and provides recommendations on the status of the financial system, issued a statement on the "international regulation and monitoring of crypto-asset operations" on Monday.

The G20 watchdog affirmed its commitment to fostering international uniformity in regulatory and oversight practices among national agencies and international standard-setters as they work to develop a risk-based, technology-neutral policy for the broad spectrum of crypto-assets, based on the principle of the same activity, same risk, same regulation.”

The FSB said that the current instability in the cryptocurrency markets "may have spill-over consequences on critical elements of traditional finance, such as short-term funding markets," noting that crypto assets, including stablecoins, are rapidly changing. According to the organization, an efficient regulatory framework must make sure that crypto-asset activities that pose risks comparable to those of traditional financial activities are subject to the same regulatory outcomes. This is done while taking into account novel features of crypto-assets and maximizing the potential benefits of the technology underlying them.

The FSB highlighted that "both domestically and internationally, crypto-assets and marketplaces need to be subject to appropriate regulation and monitoring proportional to the risks they present."

Additionally, according to the financial stability watchdog, cryptocurrency service providers "must always guarantee compliance with current legal responsibilities in the areas in which they operate."

According to the watchdog, “the FSB will provide a report on regulatory and oversight approaches to stablecoins and other crypto-assets to the G20 finance ministers and central bank governors in October.”

In February, the FSB released a study that examined the threats that cryptocurrency poses to financial stability. The report stated that because of their size, structural weaknesses, and growing interconnection with the conventional financial system, crypto-asset markets are rapidly changing and may eventually pose a danger to the integrity of the global financial system.

Last week , according to the presidential order that was issued back in March, the U.S. Treasury Department presented a crypto framework for international involvement to President Joe Biden.

WHAT'S YOUR OPINION?