The FSB promotes global financial stability by coordinating the development of regulatory, supervisory and other financial sector policies and reaching out to non-member countries. It achieves collaboration and consistency through a three-phase process.The FSB, a body of regulators, government officials and central bankers from the Group of 20 (G20) economies, has so far limited itself to monitoring the crypto sector, saying it does not pose a systemic risk. The Financial Stability Board (FSB) said on Monday it will propose “robust” global rules for cryptocurrencies in October, after recent market turbulence highlighted the need to regulate the “speculative” sector.
The FSB, a body of regulators, government officials and central bankers from the Group of 20 (G20) economies, has so far limited itself to monitoring the crypto sector, saying it does not pose a systemic risk. However, recent turmoil in crypto markets has highlighted their volatility, structural vulnerabilities and increasing links to the wider financial system, the FSB said.”The failure of a market player, in addition to imposing potentially large losses on investors and jeopardizing market confidence resulting from the crystallization of behavioral risks, can also rapidly transfer risks to other parts of the cryptoasset ecosystem,” the FSB said in a statement. .Bitcoin, the largest cryptocurrency, has plunged some 70% from a November record high of $69,000 to trade at $20,422 on Monday, leaving many investors in the red.
The Terra US Dstablecoin crashed earlier this year, and withdrawals and transfers from major crypto firms Celsius Network and Voyager Digital shook the markets. If stablecoins are to be used as a means of payment, they should be under the control of the FSB.” The FSB will brief G20 finance ministers and central bank governors on regulatory and supervisory approaches to stablecoins and other crypto-assets in October,” the FSB said.
The FSB has no legislative powers, but its members undertake to apply its regulatory principles in their jurisdictions. The watchdog lags behind the European Union, a leading member of the FSB, which approved comprehensive new rules for the crypto market this month. The FSB said crypto-assets are predominantly used for “speculative purposes” but do not operate in a “deregulated space” and must comply with relevant existing rules. Many countries require crypto firms to have anti-money laundering controls.” FSB members are committed to using enforcement powers within the legal framework in their jurisdiction to promote compliance and act against violations,” the FSB said.
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