The Financial Stability Board (FSB) issued a statement on the international regulation and supervision of crypto-asset activities. The statement highlights the importance of progressing ongoing work of the FSB and the international standard-setting bodies toward addressing the potential financial stability risks posed by crypto-assets, including stablecoins. Additionally, the FSB Plenary, held in Amsterdam, discussed the outlook for global financial stability against the backdrop of Russia’s continuing war against Ukraine as well as the FSB’s planned contributions to the July G20 Finance Ministers and Central Bank Governors meeting in Indonesia.
The statement on crypto-assets notes that crypto-assets and markets must be subject to effective regulation and oversight commensurate to the risks they pose, both at the domestic and international levels. The statement calls for adherence by stablecoins and other crypto-assets, to relevant existing requirements where regulations apply to address the risks these assets pose. The statement also calls on crypto-asset service providers to ensure compliance with existing legal obligations in the jurisdictions in which they operate at all times. FSB will continue to facilitate cross-border and cross-sectoral cooperation among national financial authorities and international standard-setting bodies toward developing a common understanding of the wide spectrum of crypto-assets as well as regulatory and supervisory policies that are risk-based, technology-neutral, and grounded in the principle of “same activity, same risk, same regulation.” The work includes the assessment of existing applicable standards, the identification of potential gaps with a view to inform possible adaptations of existing standards, and the development of new standards or implementing guidance to address new types of risks that may not adequately be captured by the existing regulatory frameworks. FSB plans to submit a report to the G20 Finance Ministers and Central Bank Governors in October on regulatory and supervisory approaches to stablecoins and other crypto-assets.
The FSB Plenary discussed the outlook for financial stability, the financial aspects of commodity markets, and the actions needed to address identified vulnerabilities in the global financial system, in addition to the following topics:
- COVID-19 exit strategies and scarring effect. Plenary highlighted that weaker and more uneven growth and higher inflation exacerbate challenges in supporting a strong, equitable and inclusive recovery from the COVID-19 pandemic. Going forward, FSB plans to publish an interim report on COVID-19 exit strategies and scarring effects in July and then the final report, taking into account feedback from stakeholders, in October.
- Crypto-assets. The Plenary discussed ongoing work on crypto-assets and the way forward, in light of recent developments. This work includes a review of the high-level recommendations on the regulation, supervision, and oversight of “global stablecoin” arrangements and the exploration of regulatory and supervisory implications of “unbacked” crypto-assets. FSB also plans to analyze the financial stability impact of the decentralized finance (DeFi) sector.
- FSB roadmap for addressing climate-related financial risks. The Plenary discussed the encouraging progress that has been made under the FSB Roadmap for addressing climate-related financial risks, which was published in July 2021. The understanding of the financial risks arising from climate change and the policy approaches needed to address them remains at an early stage. The FSB Roadmap aims to support rapid progress in this regard over the coming year (and beyond), including strengthening FSB’s engagement with the private sector.
- Other initiatives. The Plenary also discussed updates on FSB-coordinated roadmap for enhancing cross-border payments and the way forward for achieving greater convergence in cyber-incident reporting. FSB will report to the G20 on both initiatives in October.
- Press Release on FSB Statement on Crypto-Assets
- FSB Statement on Crypto-Assets (PDF)
- Press Release on FSB Plenary
Keywords: International, Banking, Securities, Stablecoins, Financial Stability, G20, Covid-19, Decentralized Finance, DeFi, Cyber Incident Reporting, Cyber Risk, Regtech, Climate Change Risk, Crypto-Assets, FSB
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