The Financial Stability Board (FSB), an international monitoring body established under a G20 summit in 2019, suggested an extensive framework to monitor cryptocurrency’s potential threats and harms.
FSB has members representing institutions from 25 jurisdictions, including financial regulators, central banks, and finance ministries. The board issued a detailed report on cryptocurrency regulation and proposed a regulatory framework aiming to address the various risks it involves while embracing the advantages of technology. The report was published on October 11 and was opened to the public to call for subjective opinions and comments on the proposed policy and its elements.
As per the report, the board plans to submit the recommendations to the G20 finance ministers and central bank governors as its plan for developing uniform crypto regulations is also addressed by IMF. On October 3, the FSB chairperson Klaas Knot stated the recent unrest in the crypto-market to be behind the group’s recommendations.
The report claims the board’s approach promotes consistency and comprehensiveness in regulating crypto-asset activities and the markets via the framework. The proposal also counted on the framework’s traits to be effective in regulating and supervising to be the core strength to ensure efficient risk management and regulation of digital assets.
FSB said that in a scenario where digital currencies or crypto-assets and intermediaries are playing a role equivalent to the one performed by the instrument and intermediaries of the conventional financial market, they should be subjected to the same level of regulation. The board’s report also aimed at stablecoins and suggested a review of associated policies established in October 2020.
Public opinion has been invited on policy initiatives and financial stability risks alongside the optimum approach the organization can use to establish conducive yet efficient guidelines for digital assets until December 15.