An international body of regulators, officials, and bankers is set to propose widespread crypto rules in October.
According to a new report from Reuters, The Financial Stability Board (FSB), an organization established by the G20 group, says the recent crypto market carnage produces a ripple effect.
“The failure of a market player, in addition to imposing potentially large losses on investors and threatening market confidence arising from crystallization of conduct risks, can also quickly transmit risks to other parts of the crypto-asset ecosystem.”
The FSB reportedly said that if stablecoins are to be used as a means of payment, the crypto sector could also come under the scope of G20 regulation.
“The FSB will report to the G20 Finance Ministers and Central Bank Governors in October on regulatory and supervisory approaches to stablecoins and other crypto-assets.”
According to Reuters, the FSB said crypto assets are mostly used for “speculative purposes” but don’t operate in a “regulation free space” and therefore must comply with relevant rules.
“FSB members are committed to using the enforcement powers within the legal framework in their jurisdiction to promote compliance and act against violations.”
Hints of more robust regulations in crypto come on the heels of a series of meltdowns in the industry. Most recently, crypto brokerage Voyager Digital announced it was filing for Chapter 11 bankruptcy following a large debt default from former hedge fund Three Arrows Capital.
Voyager CEO Stephen Ehrlich said,
“While I strongly believe in this future, the prolonged volatility and contagion in the crypto markets over the past few months, and the default of Three Arrows Capital (3AC) on a loan from the company’s subsidiary, Voyager Digital, requires us to take deliberate and decisive action now. The chapter 11 process provides an efficient and equitable mechanism to maximize recovery.”
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