Financial Stability Board Releases Statement on Global Crypto Regulation

Global financial regulator Financial Stability Board (FSB) released a statement yesterday on the “international regulation and supervision of crypto asset activities.”

The G20 regulatory agency explained that it remained committed to promoting “international consistency of regulatory and supervisory approaches amongst national authorities and international standard-setters as they work towards developing risk-based, technology-neutral policy for the wide spectrum of crypto-assets, grounded in the principle of ’same, activity, same risk, same regulation.’”

Citing the exponential growth recorded in the crypto space, including Stablecoins, the FSB argued that the lasting downturn in the crypto markets “may have spill-over effects on important parts of traditional finance such as short-term funding markets.” The agency further detailed:

“An effective regulatory framework must ensure that crypto-asset activities posing risks similar to traditional financial activities are subject to the same regulatory outcomes while taking account of novel features of crypto-assets and harnessing potential benefits of the technology behind them.”

The FSB elaborated: “Crypto-assets and markets must be subject to effective regulation and oversight commensurate to the risks they pose, both at the domestic and international level.”

Global Crypto Regulation Coming in October: Financial Stability Board

The financial watchdog explained that crypto service providers “must at all times ensure compliance with existing legal obligations in the jurisdictions in which they operate.”

Finally, the regulator’s statement mentioned:

“The FSB is working to ensure that crypto-assets are subject to robust regulation and supervision.”

The watchdog concluded: “The FSB will report to the G20 finance ministers and central bank governors in October on regulatory and supervisory approaches to stablecoins and other crypto-assets.”

Earlier this year, the financial service monitoring organization published a report evaluating the risks posed by crypto on global financial stability. The FSB report explained, “Crypto-asset markets are fast evolving and could reach a point where they represent a threat to global financial stability due to their scale, structural vulnerabilities, and increasing interconnectedness with the traditional financial system.”