G-20 watchdog to propose first global crypto rules in October.

July 13, 2022

The Financial Stability Board (FSB) would propose “robust” global rules for cryptocurrencies in October, following the recent turmoil in markets that has highlighted the need to regulate this “speculative” sector.
The FSB – a body of regulators, Treasury officials and central bankers from the Group of 20 (G-20) economies – has so far limited itself to monitoring the crypto sector, saying the industry does not seem to pose a systemic risk.
But the recent turmoil has highlighted the crypto markets’ volatility, structural vulnerabilities and increasing links to the wider financial system.
According to FSB, the failure of a market player, in addition to imposing potentially large losses on investors and threatening market confidence arising from crystallisation of conduct risks, can also quickly transmit risks to other parts of the crypto-asset ecosystem.
The value of Bitcoin – the largest cryptocurrency – has slumped some 70 per cent since its November record of US$69,000 (S$97,000). It was trading at US$20,422 on Monday, leaving many investors nursing losses.
The Terra USD stable coin collapsed earlier this year, and withdrawals and transfers from major crypto firms Celsius Network and Voyager Digital have rattled markets.
According to FSB, Stable coins should be captured by robust regulation if they are to be used as a means of payment.
FSB would report to the G-20 finance ministers and central bank governors in October “on regulatory and supervisory approaches to stable coins and other crypto assets”.
The FSB has no law-making powers, but its members commit to applying its regulatory principles in their own jurisdictions.
Many countries require crypto firms to have anti-money laundering controls.