G20 regulator to introduce global crypto rules in October 2022

The FSB seems more concerned about the crypto market given its recent turmoil and "increasing interconnectedness with the mainstream financial system ".

The Financial Stability Board (FSB), a global financial regulator comprising all G20 countries, is preparing to propose international regulation for cryptocurrencies and stablecoins in October.

The FSB on Monday issued a statement on the international regulation and supervision of crypto-asset activities, announcing a major effort to regulate crypto.

The watchdog plans to report to the G20 finance minister and central bank governors in October 2022 on regulatory and supervisory approaches to stablecoins and other crypto assets. By then, the FSB is aiming for a public consultation report on the review of the recommendations, including “how existing frameworks can be extended to fill gaps and implement high-level recommendations.”

The G20 authority also plans to submit another public consultation report that offers recommendations to promote global consistency in regulatory and oversight approaches to other crypto-assets.

“These combined efforts of the FSB and international standards bodies are intended to minimize the risk of regulatory fragmentation and arbitrage,” the FSB noted.

According to the release, the FSB's growing interest in crypto regulations is due to the recent decline in the cryptocurrency markets. The market turmoil has highlighted the problem of "crypto's growing interconnectedness with the traditional financial system," the regulator said.

“This could impact important parts of traditional finance, such as short-term funding markets,” the FSB said, adding that global regulators must oversee crypto markets in accordance with the principle “ same activity, same risk, same regulations.”

As such, a stablecoin that enters the mainstream of the financial system must adhere to "high regulatory and transparency standards, maintain reserves at all times that preserve value stability, and meet international standards relevant,” the FSB said.< /p>

The FSB's plan to come up with recommendations for unified global stablecoin regulation is quite a difficult task, according to some industry executives...