Recent reports indicate that the Financial Stability Board (FSB) of the G20 has released a set of guidelines for crypto and stablecoin policies to address regulatory gaps in the sector on a global scale.
Regulatory framework
These recommendations aim to create a standard regulatory framework, especially after the high-profile Terra (LUNA) and FTX incidents in the last year that shook the digital asset industry.
The FSB is urging governments to collaborate and exchange information across borders while also mandating that domestic regulators require crypto-asset issuers and service providers to disclose their governance structures.
“The governance framework should be proportionate to their risk, size, complexity and systemic importance, and to the financial stability risk that may be posed by activity or market in which the crypto-asset issuers and service providers are participating.”
The notes continued and said the following:
“It should provide for clear and direct lines of responsibility and accountability for the functions and activities they are conducting.”
The FSB proposes that regulators mandate crypto companies to establish extensive risk management frameworks and ensure secure collection of data.
Furthermore, the Board advises that authorities oversee the links between the crypto industry and the traditional financial world to mitigate any potential financial stability hazards that may arise from such connections.
More on crypto regulation
Recently, Coinbase CEO Brian Armstrong shared his belief that the upcoming U.S. presidential election could have a significant impact on the crypto industry.
He also acknowledged the ongoing lawsuit against Coinbase by the U.S. Securities and Exchange Commission, stating that it may provide more regulatory clarity as it moves through the legal system.
“Frankly, the 2024 election is also a factor here,” Armstrong added. “It’s kind of politically unpopular to be anti-crypto right now, and we are going to see potentially a change here, whether in administration, parties or the SEC chair.”
