The Financial Stability Board (FSB), an international body overseeing the global financial system, has proposed a global regulatory framework for cryptocurrencies. The guidelines, recommended to the G20 economies, follow the principle of "same activity, same risk, same regulation." The FSB issued a public statement and two separate guidance documents on July 17, outlining recommendations for regulating cryptocurrencies and global stablecoins.
The FSB emphasizes the need for cryptocurrency platforms to separate customers' digital assets from their own funds and to clearly define their functions to avoid conflicts of interest. It also calls for strict cross-border cooperation and supervision by regulators. The FSB B's recommendations highlight the importance of privacy, while urging regulators to have access to necessary data to fulfill their regulatory responsibilities, particularly in relation to decentralized finance (DeFi) protocols.
Regarding global stablecoins, the FSB states that issuers must have identifiable and accountable governance bodies and hold reserve assets at a minimum ratio of 1:1, unless they are subject to equivalent prudential requirements to commercial banking standards. Notably, global stablecoin issuers are required to obtain licenses to operate in each jurisdiction, subject to compliance with all regulatory requirements of that jurisdiction.
The FSB plans to review the implementation of its recommendations worldwide by the end of 2025. It will also collaborate with the International Monetary Fund (IMF) to submit a joint report to the G20 on existing policy and regulatory issues in September 2023. The FSB's stance has already influenced the European Financial Markets Association, which urged EU lawmakers to include decentralized finance in the EU-wide cryptocurrency framework based on the FSB's position.
