G20 Watchdog Announces Robust Global Crypto Regulation Coming in October – A statement on the “international regulation and supervision of crypto asset operations” was made on Monday by the Financial Stability Board (FSB), an international organization that keeps track of and makes recommendations regarding the global financial system.
According to the G20 watchdog, it is committed to fostering “international consistency of regulatory and supervisory approaches among national authorities and international standard-setters as they work toward developing risk-based, technology-neutral policy for the broad spectrum of crypto-assets, grounded in the principle of same, activity, same risk, same regulation.”
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The FSB explained that the recent 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.
The organization detailed:
“While taking into account the novel characteristics of crypto-assets and utilizing the potential benefits of the technology behind them, an effective regulatory framework must ensure that crypto-asset activities that pose risks comparable to those of traditional financial activities are subject to the same regulatory outcomes.”
The FSB explained that “both domestically and internationally, crypto-assets and marketplaces must be subject to appropriate regulation and control corresponding to the risks they entail.”
Additionally, according to the financial stability watchdog, cryptocurrency service providers “must always ensure compliance with current legal responsibilities in the areas in which they operate.”
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The FSB released a report in February that examined the threats that cryptocurrency poses to financial stability. Due to its size, structural vulnerabilities, and growing interconnection with the existing financial system, the report stated that “Crypto-asset markets are swiftly changing and could reach a stage where they represent a threat to global financial stability.”
As instructed by the executive order issued back in March, the U.S. Treasury Department last week sent President Joe Biden a crypto framework for global engagement.
