Financial Stability Board Proposes Framework for the International Regulation of Crypto Assets
The Financial Stability Board (FSB) has published new framework for the international regulation of crypto-asset activities.
The core components of this framework are proposals for
- recommendations that promote the consistency and comprehensiveness of regulatory, supervisory and oversight approaches to crypto-asset activities and markets and strengthen international cooperation, coordination and information sharing; and
- 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.
They are grounded in the principle of “same activity, same risk, same regulation”: where crypto-assets and intermediaries perform an equivalent economic function to one performed by instruments and intermediaries of the traditional financial sector, they should be subject to equivalent regulation.
Regulation should also take account of novel features and specific risks of crypto-assets and address potential financial stability risks that could arise from the growing interlinkages between the crypto-asset ecosystem and the traditional financial system.
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 FSB is soliciting comments from the public on the proposed recommendations. The framework note includes a set of questions for this purpose.
The FSB encourages all interested stakeholders to participate in the consultation. Responses should be sent to firstname.lastname@example.org by Thursday 15 December 2022.