The Financial Stability Board (FSB) which is an international body that monitors and makes recommendations about the global financial system published a proposed framework for International Regulation of Crypto-asset Activities on 11 October 2022. The said framework sets out a) the key issues and challenges in developing a comprehensive and consistent regulatory approach that captures all types of crypto-asset activities that could rise to financial stability risks; b) policy initiatives at the jurisdictional and international levels; c) the FSB’s proposed approach for establishing a comprehensive framework.
The FSB reports that crypto-assets and markets must be subject to effective regulation and oversight commensurate with the risks they pose. Crypto-asset markets are fast evolving and could reach a point where they represent a threat to global financial stability due to their scale, structural vulnerabilities and increasing interconnectedness with the traditional financial system.
WSBI-ESBG, for its part, welcomed the initiative of addressing the above-mentioned crucial issues and replied to the call for feedback on this consultative document on a proposed framework for International Regulation of Crypto-asset Activities, in particular calling for a more measured regulatory approach between the several players (i.e.; financial institutions, issuers, and providers of crypto assets) and for consistency between regulations and requirements applicable to traditional finance and crypto-based finance.
Finally, members underlined the importance of having a clear and dynamic regulatory approach to avoid confusion on the categorization of crypto-assets (i.e.; stablecoins, global stablecoins, digital assets), and the need for a higher consistency between local and international regulations.
