Financial Stability Board Urges Global Consistency in Crypto-Asset Regulation
The Financial Stability Board said Wednesday (Oct. 16) that jurisdictions should fully and consistently implement the FSB Global Framework for Crypto-asset Activities to eliminate the gaps and inconsistencies that currently exist.
As of August, jurisdictions have made progress in regulating crypto-asset activities, have made less progress in regulating global stablecoin arrangements, and have left gaps and inconsistencies that “could pose risks to financial stability and to the development of a resilient digital asset ecosystem,” the FSB said in a press release outlining findings from its peer review of progress in implementing the 2023 global framework.
“FSB urges jurisdictions to prioritize full and consistent implementation, so as to minimize the risk of regulatory arbitrage and to improve the oversight of an inherently global crypto-asset market,” the release said.
The 2023 global framework includes recommendations on crypto-asset service providers and stablecoin arrangements, data reporting and collection, and cross-border cooperation and coordination, according to the release.
The gaps and inconsistencies found in the peer review come about when finalized regulatory frameworks do not fully align with the FSB recommendations, the release said.
Outstanding issues identified in the peer review include jurisdictions’ progress in implementation, the comprehensiveness and consistency of the implementation, and cross-border cooperation and coordination, per the release.
“Implementation progress remains incomplete, uneven and inconsistent,” Arthur Yuen, deputy chief executive of the Hong Kong Monetary Authority and chair of the team that prepared the report, said in the release. “This creates opportunities for regulatory arbitrage and complicates oversight of the inherently global and evolving crypto-asset market.”
The FSB brings together national authorities responsible for financial stability in 24 countries and jurisdictions, and it conducts outreach with about 70 other jurisdictions, according to the release.
When the FSB unveiled the global framework for cryptocurrency in 2023, PYMNTS reported that the guiding principle behind it was “same activity, same risk, same regulation.”
The FSB said at the time that the framework “provides a strong basis for ensuring that crypto-asset activities and so-called stablecoins are subject to consistent and comprehensive regulation, commensurate to the risks they pose, while supporting responsible innovations potentially brought by the technological change.”
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