The Financial Stability Board (FSB), a worldwide financial organization affiliated with the G20, has released a paper calling for the cryptocurrency market to be regulated at the global level. According to the FSB, the cryptocurrency market is developing quickly to the point where more targeted control is required. A list of inquiries has been released by the worldwide watchdog, and until December 15 the general public is encouraged to comment.
The FSB considers cryptocurrency to be a threat to financial stability.
The G20 summit, which lasted for two days and was held in Washington, started on October 12 with a focus on cryptocurrency markets, particularly unstable stablecoins. Because of its “scale, structural vulnerabilities, and growing interconnection with the traditional financial system,” the FSB is concerned that the cryptocurrency market could pose a threat to international financial stability.
“An effective regulatory framework must ensure that crypto-asset operations are subject to comprehensive regulation, accordance to the risks they pose, while leveraging potential benefits of the technology behind them,” the global watchdog says in reference to a broad regulatory framework for the crypto asset class.
The paper focuses on the main problems and difficulties in creating thorough regulations and policy initiatives at the national and global levels. It also takes into account a potential strategy for creating a regulatory framework.
Additionally, it is looking for public feedback on the report and is inviting all interested parties to contribute. This includes a series of inquiries pertaining to worldwide stablecoins. This will be accessible till December 15.
Global Crypto Regulation Looming
The FSB’s research follows its July 2022 announcement of its plans to regulate the cryptocurrency sector, in which it discussed the necessity to address stablecoins. In February 2022, it also released a paper on the potential impact of cryptocurrency on financial stability worldwide.
Any recommendations the FSB makes could have a significant impact on the cryptocurrency market because it reports to the G20 countries. The MiCA measure, which handles stablecoins and the fight against money laundering, is already near to completion in the European Union and will represent a significant shift for the cryptocurrency sector.
According to the FSB research, national and international regulatory bodies are getting closer to controlling the cryptocurrency industry. Authorities have repeatedly stated that international collaboration is necessary to control the cryptocurrency market, and 2022 is expected to be a watershed year for crypto regulation.
The crypto market is now generally aware of the FSB’s priorities for the issue of crypto regulation. Two significant events will have occurred in the market by December 2022: the potential elaboration of the FSB’s regulatory proposals and the adoption of the MiCA law by the European Union. It might also encourage the regulation of cryptocurrencies in other nations.Share & like