In response to perceived threats to traditional financial markets, Financial Sector Board (FSB), an international body that monitors and makes recommendations about the global financial system, is currently preparing regulation recommendations for cryptos, particularly stablecoins.
According to the body:
“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.”
– Financial Stability Board (FSB)
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SEE ALSO: Why is this UN Body Pushing for Developing Nations in Africa to Regulate CryptoCurrencies?
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In a statement, FSB revealed that part of its work leading to the October 2022 report is supporting financial authorities and international standard-setting bodies as they work towards ‘developing a common understanding of the wide spectrum of crypto-assets as well as regulatory and supervisory policies that are risk-based technology-neutral, and grounded in the principle of ‘same activity, same risk, same regulation.”
Ahead of the report, the organization is conducting:
- The assessment of existing applicable standards
- The identification of potential gaps with a view to inform possible adaptations of existing standards
- The development of new standards
FSB also says that, besides introducing new financial standards, it is ‘implementing guidance to address new types of risks that may not adequately be captured by the existing regulatory frameworks in a manner that promotes international consistency and responsible innovation.’
The organization points out that stablecoins need to be monitored to ensure that they:
- Are held to high regulatory and transparency standards
- Maintain, at all times, the reserves that preserve stability of value
- Meet relevant international standards
“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.”
– Financial Stability Board
As such, the body is scheduled to deliver a report to G20 member countries in October 2022 where it will lay out its recommendations for regulating cryptocurrencies.
This is a summary of a statement released by FSB, which you can read / download below:
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RECOMMENDED READING: Regulation Key to Mass Adoption of Cryptocurrencies, Says U.S. Fed Official
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