The Financial Stability Board (FSB) said that it is currently working to ensure that crypto-assets are subject to robust regulation and supervision, and that it will report to the G20 Finance Ministers and Central Bank Governors in October about it.
“Crypto-assets, including so-called stablecoins, are fast-evolving. The recent turmoil in crypto-asset markets highlights their intrinsic volatility, structural vulnerabilities and the issue of their increasing interconnectedness with the traditional financial system,” the FSB said in a statement.
The FSB is an international body that monitors and makes recommendations about the global financial system.
It was established after the G20 London summit in April 2009, in which the governments pledged to do all they can to restore confidence, growth and jobs; repair and strengthen the financial system; promote global trade and investment and reject protectionism; and build an inclusive, green and sustainable recovery for all.
Currently, the members of the G20 are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States, and the European Union.
“Crypto-assets and markets must be subject to effective regulation and oversight commensurate to the risks they pose, both at the domestic and international level,” the FSB added.
The watchdog also emphasized that because crypto-assets are used for speculative purposes, they are subject to regulations applicable to the underlying economic and financial nature of crypto-assets, in line with the principle of “same activity, same risk, same regulation.”
“Crypto-asset service providers must at all times ensure compliance with existing legal obligations in the jurisdictions in which they operate,” the FSB stressed.
Further, it explained that individuals and entities operating in crypto-asset markets must be aware that they should meet all applicable regulatory, supervisory and oversight requirements of a particular jurisdiction before commencing any operations.
According to its statement, the FSB clarified that its proposal is a must because the recent turmoil in crypto-asset markets highlights the importance of addressing the potential financial stability risks posed by crypto-assets, including stablecoins.
“FSB members are committed to using the enforcement powers within the legal framework in their jurisdiction to promote compliance and act against violations,” the watchdog concluded.
This article is published on BitPinas: G20 Watchdog to Propose Global Crypto Regulation By October
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