FSB proposes framework for international cryptoasset regulation


The Financial Stability Board (FSB) has published a proposed framework for the international regulation of crypto-asset activities.

According to the FSB, the core components of this framework are proposals for recommendations that promote the consistency and comprehensiveness of regulatory, supervisory and oversight approaches to cryptoasset activities and markets and strengthen international cooperation, coordination and information sharing.

The other components include revised high-level recommendations for the regulation, supervision, and oversight of ‘global stablecoin’ arrangements to address associated financial stability risks more effectively.

The proposed recommendations are issued for public consultation. According to the FSB, regulation should take account of novel features and specific risks of crypto assets and address potential financial stability risks that could arise from the interlinkages between the cryptoasset ecosystem and the traditional financial system.

The FSB said, “High regulatory standards should apply to crypto-assets – such as stablecoins – that could be widely used as a means of payments and/or store of value, as they could pose significant risks to financial stability. The proposed revisions high-level recommendations for the regulation, supervision, and oversight of ‘global stablecoin’ arrangements strengthen the requirements for users’ redemption rights and for a robust stabilisation mechanism.

“The two sets of recommendations are closely interrelated, reflecting the interlinkages between stablecoins and the broader crypto-asset ecosystem. They have been developed as stand-alone documents but are intended to work together in light of these interlinkages and to be consistent where they cover the same issues and risks.”

The Board is soliciting comments from the public on the proposed recommendations, with responses required to be sent by 15 December 2022.

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