G20 Watchdog Says 'Robust' Crypto Rules Coming in October
Categories: Crypto News US
G20 Watchdog Says 'Robust' Crypto Rules Coming in October
The Financial Stability Board (FSB) today announced it will come up with its own proposal for rules ensuring robust regulation and supervision of cryptocurrencies.
The organization, which includes treasury officials and central bankers from the Group of 20 economies (G20), said it will report to the G20 finance ministers and central bank governors in October, outlining its regulatory and supervisory approaches to stablecoins and other crypto assets.
“Crypto-assets, including so-called stablecoins, are fast-evolving. The recent turmoil in crypto-asset markets highlights their intrinsic volatility, structural vulnerabilities and the issue of their increasing interconnectedness with the traditional financial system,” the FSB said in a statement.
The organization added that even the failure of one single market player can result not only in “imposing potentially large losses on investors and threatening market confidence,” but can also “quickly transmit risks to other parts of the crypto-asset ecosystem.”
Today’s announcement comes in the wake of the dramatic collapse of the Terra ecosystem in May and the ensuing liquidity crisis—and, eventually, bankruptcy—faced by several high-profile crypto lending firms and hedge funds.
Notably, this is also the first time when the FSB would propose specific rules for the crypto space—although the organization has been closely monitoring the industry, it has so far refrained from any action.
“Regulations in the crypto world have always met skepticism because they are at odds with the fundamental principles of crypto being free and decentralized,” Pedro Herrera, a senior blockchain analyst at DappRadar told Decrypt.
“For digital currencies to go mainstream, stablecoins must be trusted by the public, and fully fungible with other types of public and private money. The only realistic way for that to happen is via a shared regulatory framework,” the Millicent boss added.
“It’s heartening to see more and more policymakers and regulators recognize that crypto is here to stay,” Igneus Terrenus, head of communications at crypto exchange ByBit, told Decrypt. “This emergent consensus will ensure the healthy development of the fast-growing and fast-changing industry for decades to come.”Terrenus added that ByBit would be happy to contribute its knowledge and resources to such endeavors.