BASEL, Switzerland—The Financial Stability Board (FSB) has published its global regulatory framework for crypto-asset activities to promote the” comprehensiveness and international consistency of regulatory and supervisory approaches.”
“The events of the past year have highlighted the intrinsic volatility and structural vulnerabilities of crypto-assets and related players,” the FSB stated. “They have also illustrated that the failure of a key service provider in the crypto-asset ecosystem can quickly transmit risks to other parts of that ecosystem. As recent events have illustrated, if linkages to traditional finance were to grow further, spillovers from crypto-asset markets into the broader financial system could increase.”
The FSB reminded the G20 tasked the Board to coordinate the delivery of an effective regulatory, supervisory and oversight framework for crypto-assets.
“The framework takes account of lessons from events of the past year in crypto-asset markets and feedback received during the FSB’s public consultation,” the FSB said.
The Recommendations
According to the FSB, the framework consists of two sets of recommendations:
- High-level recommendations for the regulation, supervision and oversight of crypto-asset activities and markets
- Revised high-level recommendations for the regulation, supervision, and oversight of “global stablecoin” arrangements
‘Implementation Experiences’
“The final recommendations draw on the implementation experiences of jurisdictions and build on the principles – ‘same activity, same risk, same regulation’; high-level and flexible; and technology neutral – that informed the consultative framework,” the FSB stated. “In light of events of the past year, the FSB has strengthened both sets of high-level recommendations in three areas: ensuring adequate safeguarding of client assets; addressing risks associated with conflicts of interest; and strengthening cross-border cooperation.”
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