The Financial Stability Board (FSB) under the G20 has developed recommendations for a global regulatory framework for cryptocurrencies.
The document consists of two sets of recommendations:
- high-level guidance on the regulation of digital assets in general;
- revised high-level recommendations for ‘global stablecoin’.
According to the document, any issuer stablecoin must have one or more identifiable and responsible legal or natural persons — an ‘governing body’. It must hold reserves in a minimum 1:1 ratio and be licensed to operate in each jurisdiction.
In the view of the FSB, crypto platforms should separate clients’ digital assets from their own funds and clearly delineate their functions to avoid conflicts of interest. Regulators, in turn, must ensure cross-border cooperation in supervising industry participants.
The guidance is recommended for the world’s 20 leading economies and is built on the principle ‘same activity, same risk, same regulation.’ By the end of 2025, the FSB intends to review the global implementation of the recommendations worldwide.
Earlier in the G20’s advisory body concluded that none of the existing stablecoins meets the standards set for digital assets by the central banks of the world’s largest economies.
In December 2022 the FSB announced proposals for regulating the crypto market with a concrete timetable for their implementation. The catalyst for the initiative was the collapse of FTX.