The Financial Stability Board (FSB) said it is developing a “robust” framework for the regulation and supervision of crypto assets, with a report due to be presented to G20 finance ministers and central bank governors in October.
The FSB, the international body that monitors the global financial system and issues policy recommendations, said regulators and standard-setting organizations should work toward greater international consistency in the oversight of crypto activities. Its approach is based on the principle of “same activity, same risk, same regulation”, meaning crypto activities that pose risks similar to those found in traditional finance should face comparable regulatory outcomes.
According to the statement, an effective framework must address risks arising from crypto-asset activities while also accounting for the sector’s novel features and the potential benefits of the underlying technology. The FSB specifically noted that crypto assets, including stablecoins, are evolving rapidly, and recent turmoil in crypto markets could spill over into important areas of traditional finance such as short-term funding markets.
Cross-border coordination is a central focus
The watchdog said crypto assets and markets should be subject to effective regulation and oversight at both the domestic and international levels, in line with the risks they pose. It also stressed that crypto service providers must comply at all times with existing legal obligations in every jurisdiction where they operate. That signals a regulatory direction that places greater emphasis on the compliance responsibilities of exchanges, issuers, and other market intermediaries.
The FSB said it will formally report in October on regulatory and supervisory approaches for stablecoins and other crypto assets. The upcoming submission is likely to be closely watched as a potential reference point for how major economies align their crypto rules.
Earlier warnings on financial stability risks
Back in February, the FSB published a separate report examining crypto-related threats to financial stability. That report said crypto-asset markets are evolving quickly and could eventually pose a risk to global financial stability because of their scale, structural vulnerabilities, and growing interconnectedness with the traditional financial system.
The latest statement also comes as major jurisdictions step up policy work around digital assets. Last week, the U.S. Treasury Department submitted an international crypto engagement framework to President Joe Biden, as directed by an executive order issued in March. Taken together, these developments suggest that global coordination on crypto oversight is intensifying, with the FSB’s October recommendations set to play an important role in the next phase of policy discussions.