G20 Watchdog To Issue Global Rules For Crypto In October

On Monday, the Financial Stability Board (FSB) said that it would come up with a set of global crypto rules in October. This news came after the cryptocurrency market has seen a great deal of turmoil, which has highlighted the need for introducing regulations to oversee this ‘speculative’ and volatile sector.

Recent turmoil prompts regulation

The FSB comprises central bankers, treasury officials, and regulatory authorities that represent the Group of 20 economies (G20). Up until now, it had restricted itself to keeping an eye on the crypto sector, as it said that the market did not carry a systemic risk.

But, this has obviously changed, all because of the recent turmoil that has been seen in the crypto market. It has highlighted just how the space really is and also shed light on the structural vulnerabilities it has. Most importantly, the FSB said that it also disclosed how interconnected the crypto market has become with the wider financial system.

According to the FSB, the failure of just one player in the market not just means hefty losses for investors, but also threatens the confidence of the other players in the market. This gives rise to risks that are also transmitted to other aspects of the cryptosystem.

The TerraUSD collapse

This phenomenon became obvious with the collapse of the TerraUSD (UST) algorithmic stablecoin back in May. The world’s largest cryptocurrency i.e. Bitcoin reached an all-time high value of $69,000 back in November last year. It had come down since then and has now recorded losses of 70%, as it was trading at a value of $20,422 on Monday. Many investors have suffered losses due to its downfall.

But, the collapse of the UST stablecoin and its sister token LUNA rattled markets because the contagion seems to have spread to other companies in the crypto space. This includes names like Three Arrows Capital, Voyager Digital, Celsius Network, and Babel Finance. In fact, the first two companies have now filed for bankruptcy.

The FSB said that if stablecoins are meant to be used as a method of payment, then it is a must to introduce robust regulation for governing them.

Comprehensive rules

The FSB asserted that it would present a set of supervisory and regulatory approaches for stablecoins and other crypto assets to the Governors of Central Banks and G20 Ministers in October. While the authority does not have any lawmaking powers, the organization’s members do implement its regulatory principles in their respective jurisdictions.

The European Union is one of the top members of the watchdog, but the latter is lagging behind the latter when it comes to developing a set of comprehensive rules for crypto regulation. According to the FSB, while crypto assets are primarily used for speculation, it does not mean that they do not need to comply with the rules that exist.

As a matter of fact, there are a number of countries that require crypto companies to comply with anti-money laundering rules.

Leave a Reply

Your email address will not be published.

Related

Genesis Halts Withdrawals Amid a Collapse of The Digital Currency Market

Genesis Global Capital has stopped processing withdrawals, confirming this week’s rumors. This is the most current lending program to file for bankruptcy. In 2022, Celsius Network, Voyager Digital, and other companies did so. At the moment, Derar Islim is Genesis’ acting CEO. Islim told Investors that the firm is looking at its options and seeking […]

Nayib Bukele Pledges To Buy 1 BTC Daily for El Salvador

The President of Els Salvador has pledged to start buying at least 1 BTC daily. This news emerged months after El Salvador is said to have completed its final BTC acquisition, 80 BTC at quite a cost of $19k each, in July this year. Previous Buy History of El Salvador  As per information from Buy BTC […]

Amid The FTX Crisis, Binance Receives an FSP License in Abu Dhabi

The Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market (ADGM) has awarded Binance the Financial Services Permission (FSP) status. As a result, Binance, the world’s largest cryptocurrency exchange, is set to begin offering custody services in ADGM. Binance’s Plans to Expands into The Middle East Binance has gotten the green light to […]

MoneyGram Incorporates Cryptocurrency Exchange for US Subscribers

In recent news, MoneyGram has incorporated digital assets exchange for its US subscribers. In this update, the financial institution temporarily supported digital assets like BTC, ETH, and LTC. The firm has also stated goals to accept multiple cryptocurrencies and extend the operation to more regions in the long term. Updates on MoneyGram’s Latest Service Addition […]

FTX-Linked Crypto Exchange Has Stopped Accepting Withdrawals And Deposits

When fiat and cryptocurrency withdrawals were temporarily disabled on the Liquid Global platform on November 15, the FTX-owned cryptocurrency exchange Liquid announced this on Twitter. Liquid Suspends Deposits The collapse of crypto firms associated with Sam Bankman-Fried has already had a severe rippling effect on various organizations inside the ecosystem. For example, the CEO of […]