Cryptocurrencies continue to attract attention at both the individual and institutional level. This being the case, this interest is not ignored at the level of states. The Financial Stability Board highlighted new global rules for cryptocurrencies in a recent call. In this context, the Financial Stability Board (FSB) will present a report to G20 Finance Ministers and Central Bank Governors on the regulatory and supervisory approaches to stablecoins and other cryptoassets in October.
Report on Crypto Assets Coming from Financial Stability Board
Cryptocurrencies are cited as proof of risk for financial stability after the recent market crash. It is said that the risks of a market player’s failure will quickly reflect on other stakeholders of the ecosystem. The Financial Stability Board (FSB) also drew attention to the collapse of Terra in its latest statement and focused on stablecoins, which is the agenda of many financial authorities.
Some of the notable sentences in the FSB’s report are as follows:
“Crypto-assets and markets should be subject to effective regulation and oversight commensurate with the risks they pose, both locally and internationally. Crypto asset service providers must always ensure compliance with current legal obligations in the jurisdictions in which they operate. If stablecoins are to be considered a widely used means of payment or otherwise play an important role in the financial system, they must be seized with sound regulation and scrutiny from the relevant authorities.”
The statement made by the FSB actually aligns with several comments from senior financial officials and committees. On July 5, the Bank of England Financial Policy Committee warned that crypto assets could one day pose a risk to the wider financial system and said that this could be avoided by regulation.
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