The Financial Stability Board (FSB) on Monday cryptocurrencies called for the creation of new global rules for
FSB to Submit New Report on Cryptocurrencies to G20 Representatives in October
Additionally, the FSB will present a report to G20 Finance Ministers and Central Bank Governors in October on regulatory and supervisory approaches to stablecoins and other cryptoassets.
The board, made up of regulators, government officials and central bankers, pointed to recent market turmoil as evidence of risk to financial stability, stressing that the failure of one market participant can quickly transfer risks to other parts of the ecosystem and have spillover effects on traditional finance.
The FSB’s statement was made with reference to stablecoins following the Terra collapse, which has been on the agenda of many financial authorities since its collapse in May.
The FSB is an international organization based in Switzerland that coordinates and promotes international financial stability.
Its members include national authorities and central banks from 24 countries, including the USA, Russia and China, and are in contact with nearly 70 more countries.
Although current market conditions prompt the FSB to act now, the institution bitcoin and has been examining cryptocurrencies for a while.
In February, it released a report assessing the risks posed by cryptoassets, warning that they could undermine global financial stability due to their scale, structural vulnerabilities and growing links to the traditional financial system.
The FSB’s statement also aligns with several recent comments from senior financial officials and committees.
On July 5, the Bank of England Financial Policy Committee called for “advanced regulation”, warning that crypto assets could one day pose a risk to the overall financial system.
Last Friday, this view was echoed by US Federal Reserve Deputy Governor Lael Brainard, who said the industry needed “strong firewalls”.
*Not investment advice.