The Financial Stability Board, the world’s largest financial services regulator, is reportedly planning to roll out a global regulatory scheme for cryptocurrencies in early 2023.
According to a new Financial Times report, the FSB will announce in the coming months a timeline for the implementation of international crypto rules that local governments would then impose.
Per the report, Dietrich Domanski, the FSB’s outgoing secretary general, says the intent is to hold crypto service providers “to the same standards as banks… if they provide the same service that banks provide.”
The FSB is looking at rules for crypto-related companies that offer a combination of financial services that are traditionally kept separate: the governance of financial transactions plus the transparency and the protection of clients’ funds.
The FSB’s push to regulate crypto is spurred by November’s implosion of the FTX crypto exchange and the May collapse of Terraform Labs’ Terra USD stablecoin, according to Financial Times.
Says Domanski,
“Many crypto market participants argue that authorities are hostile to innovation. I would say so far, authorities have been fairly accommodating… recent events have reinforced the recognition that it is indeed urgent to address risks.”
Per the report, Domanski says that international crypto rules could have prevented an FTX implosion but defended the group for waiting until now to act, saying they needed time to understand the technology and see how it would evolve.
Says Domanski,
“All of those who say, you should move faster, you should do more, I would invite them to follow a global co-operative process… and then tell me where there are spots that we could have moved faster.”
Many groups have long called for global regulations on crypto, including UNICEF. The United Nations fund devoted to helping disadvantaged children previously said crypto could improve remittances and make social assistance programs more efficient, but left unregulated poses serious threats.
Per the report, the FSB’s plan is intended to bring a uniform approach to crypto and show regulatory progress.
Says Domanski,
“One objective of this work plan is precisely to counter a perception that all this (work on cryptocurrency) is dispersed and slow and is not focused on a single common goal.”
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