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.


AI Center Indicts ChatGPT Developer of Trade Law Violations: Claims Bias & Deception

The organization alleges that the creator of ChatGPT has violated Section 5 of the Federal Trade Commission Act with the release of GPT-4. This section of the act prohibits any practices or acts considered deceptive or unfair and that affect commerce. CAIDP has complained to the US Federal Trade Commission, intending to prevent the distribution […]

Investors Excited As XRP Market Capitalization Hits $20 Billion

It’s been wide jubilation today after XRP investors heard the announcement that the market capitalization has surged to $20 billion. XRP: a cryptocurrency developed and managed by Ripple, a San Francisco, United States, distributed data company. It was gathered that the coin itself responded to this development through a climb in price – it was […]

Belgium Regulator Sets To Impose New Crypto Ads Rules

The Belgium government has mandated that every firm offering crypto advertisements should register with it before launching any campaign. Henceforth, any crypto advertisement without the government’s backing would be treated as an offense with heavy consequences. According to the report, the Financial Services and Markets Authority (FSMA) of Belgium recently announced that every potential crypto […]

Governments Who ban Drugs Should Ban Crypto Too, Said Belgium’s Ex-Finance Minister

The former finance minister of Belgium, Johan Van Overtveldt, reportedly suggested that any country that bans drugs should also ban crypto assets. According to reports, he made the statement during the recently concluded European Parliament meeting. During the meeting, the parliament was reportedly deliberating on the effect the recent collapse of three crypto-friendly banks, Silvergate […]

Founder of Messari Tweets Compelling Pro-BTC Post Amid Bearish Development

Latest report says that Ryan Selkis, the creator of the crypto analytics company Messari, has advocated for the purchase of Bitcoin on Twitter in response to the current gloomy feeling and negative sentiments in the cryptocurrency market (BTC). This occurs as the value of the top cryptocurrency has dropped 8.27% over the past 24 hours, […]