G20 Watchdog Will Propose First Global Crypto Rule in October
The Financial Stability Board (FSB) said on Monday it would propose “stronger” global regulations for cryptocurrencies in October, following the recent turmoil in the markets that has highlighted the need to regulate the “speculative” sector.
The FSB, a body of regulators, treasury officials and central bankers from the Group of 20 economies (G20), has so far limited itself to monitoring the crypto sector, saying it does not pose a systemic risk.
But the recent turmoil in crypto markets has exposed their volatility, structural weaknesses and growing links to the broader financial system, the FSB said.
The FSB said in a statement, “The failure of a market player, in addition to imposing potentially large losses on investors and jeopardizing market confidence arising from the crystallization of conduct risks, may affect other parts of the crypto-asset ecosystem.” I can also transmit the risk quickly.” ,
The value of bitcoin, the largest cryptocurrency, is down nearly 70% since its record high of $69,000 in November and was trading at $20,422 on Monday, leaving many investors at a loss.
The TeraUSD stablecoin collapsed earlier this year, and withdrawals and transfers from major crypto firms Celsius Network and Voyager Digital caused a stir in the markets.
The FSB stated that stablecoins should be superseded by stronger regulation if they are to be used as a means of payment.
“The FSB will report in October to G20 finance ministers and central bank governors on regulatory and supervisory approaches to stablecoins and other crypto-assets,” the FSB said.
The FSB has no law-making power, but its members commit to implementing its regulatory principles within their own jurisdiction.
The watchdog is lagging the European Union, a key member of the FSB, which this month agreed sweeping new rules for the crypto market.
The FSB said cryptocurrencies are primarily used for “speculative purposes” but do not operate in a “regulation-free space” and must comply with relevant existing regulations.
Many countries require anti-money laundering controls for crypto firms.
“FSB members commit to using enforcement powers within the legal framework in their jurisdiction to promote compliance and take action against violations,” the FSB said.