The head of the FSB thinks that many stablecoins are legally incapable.
The BIS-affiliated institution will make recommendations on the regulation of cryptocurrencies. The FSB is expected to announce its recommendations on overseeing the industry in July 2023.
FSB to Share Notes on Overseeing the Crypto Market in July 2023
The black 2022 year of the cryptocurrency industry has shown that the industry needs to be regulated much more seriously.
The Financial Stability Board (FSB) will share its audit recommendations on global cryptoasset audits in July 2023.
A report released by the FSB on February 16 noted that the institution’s interest in DeFi has increased. Knot noted that the recommendations in the report could be bad for some stablecoins:
“The work of the FSB and the guidance of the BIS and the International Organization of Securities Commissions show that many existing stablecoins will not be able to meet these recommendations.”
In a letter sent to the Finance Ministers and Central Bank members of the G20 on February 20, FSB chairman Klass Knot shared how the FSB will address the factors that may threaten financial stability.
Crypto assets and DeFi have an important place among the elements that the FSB considers as threats. The group of G20 ministers and bankers will meet in Bengaluru, India on February 24-25.
Chairman Knot noted that the FSB is in a very grounded effort to finalize a cryptocurrency regulatory framework in 2023. The FSB is an advisory body to the Bank for International Settlements (BIS) created by the G20.
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