G20 Will Propose to Create First Global Crypto Rule by October 2022
Navigasi - The Financial Stability Council (FSB) said on Monday, July 11, 2022, it would propose “strong” global rules for cryptocurrencies by October 2022, following recent turmoil in the market that has highlighted the need to regulate the “speculative” sector.
|G20 Will Propose to Create First Global Crypto Rule by October 2022|
The FSB, the regulatory body, treasury and central bank officials of the Group of 20 (G20) economies, has so far limited itself to monitoring the crypto sector, saying it poses no systemic risk.
However, the recent turmoil in crypto markets has highlighted volatility, structural vulnerabilities, and increased links to the broader financial system, the FSB said.
"Failures of market participants, apart from inflicting huge potential losses on investors and threatening market confidence arising from the crystallization of behavioral risk, can also rapidly transmit risk to other parts of the crypto asset ecosystem," the FSB said in a statement. Tuesday (12/7/2022).
The value of bitcoin, the largest cryptocurrency, has slumped about 70 percent since its November record of $69,000 and is now trading at around $20,000.
“The FSB will report to G20 Finance Ministers and Central Bank Governors in October on regulatory and supervisory approaches to stablecoins and other crypto assets,” the FSB said.
The FSB does not have legislature power but its members are committed to implementing regulatory principles in their own jurisdictions. The watchdog lags behind the European Union, a leading member of the FSB, which approved comprehensive new rules for crypto markets this month.
The FSB said crypto assets are mostly used for "speculative purposes" but do not operate in a "regulation-free space" and must comply with existing relevant rules. Many countries require crypto companies to have anti-money laundering controls.
"FSB members are committed to using law enforcement powers within the legal framework in their jurisdiction to promote compliance and act against violations," the FSB concluded.