According to a statement released on Monday, the Financial Stability Board (FSB), a global organization that keeps an eye on financial systems and suggests regulations in an effort to avert financial crises, intends to offer suggestions for regulating cryptocurrency in October.
The Group of Twenty (G-20) of the top economies in the world receives reports from the Basel, Switzerland-based organization. According to the board, stablecoins and other crypto assets would be covered by the recommendations.
FSB wants to ensure robust regulations for crypto
The recent “turmoil” in the cryptocurrency markets highlights the inherent volatility and structural vulnerabilities as well as the growing interconnectedness between crypto markets and the conventional financial system.
“The FSB is working to ensure that crypto-assets are subject to robust regulation and supervision.”Statement
The recent collapse of the private stablecoin TerraUSD (UST) and the decline of the cryptocurrency market are hastening regulatory action.
With a strong focus on stablecoin regulations, policymakers in the European Union came to an agreement in June on a historic measure to regulate cryptocurrency issuers and service providers.
The FSB issued a study in February cautioning that the uncontrolled cryptocurrency industry might undermine global financial stability, in part due to its explosive expansion.
According to FSB Chair Klaas Knot, the organization is “ideally positioned” to take the initiative in establishing a “coherent worldwide regulatory framework for crypto assets.”
The FSB intends to deliver a report to the G-20 in October following a public consultation on its “high-level suggestions for the regulation, monitoring, and oversight of stablecoins.”
In order to “address gaps” and execute its suggested regulations, the proposed rules may contain strategies for extending current frameworks.
A public consultation paper with recommendations for “enhancing international uniformity of regulatory and supervisory approaches to other crypto-assets” is also something the FSB intends to present. The other assets were not included in the statement.