The Financial Stability Board (FSB) of the G20 is set to present recommendations for regulating cryptocurrencies in October 2022.
“Crypto assets, including the so-called stablecoins, are developing rapidly. Recent turmoil in digital-asset markets underscores their inherent volatility, structural vulnerabilities and the problem of increasing interconnectedness with the traditional financial system,” the organisation said.
The FSB noted that losses among crypto investors threaten ‘contagion’ to certain traditional financial markets, such as the short-term lending sector.
According to the organisation’s experts, crypto assets ‘should be subject to effective regulation and supervised in a manner proportionate to the threats they pose, at both domestic and international levels’.
The FSB believes that existing general norms and rules for financial markets apply to digital assets.
“Cryptocurrencies are predominantly used for speculative purposes and largely remain outside the financial guarantees that participants in transactions should be fully aware of,” the FSB specialists stressed.
They said they would present ‘a robust approach to regulating and supervising stablecoins and other crypto assets’ in October.
“The FSB will also publish, for public consultation, a report that will propose recommendations to foster a coherent international approach to supervising crypto-asset markets and to strengthen cooperation and coordination. These joint efforts by the FSB and global standard-setting bodies aim to minimise the risk of fragmentation and regulatory arbitrage,” the organisation’s experts noted.
Earlier, in October 2021, the FSB formulated ten recommendations for a global approach to regulating stablecoins.
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