Global regulation of cryptocurrencies could be a fact
Hello friends. The Financial Stability Board has published recommendations for the global regulation of cryptocurrencies, which could have a significant impact on the market. The G20 countries are expected to start implementing these recommendations in the coming months.
The Financial Stability Board (FSB) is an international organization created by the G20 to prevent global financial crises. The FSB has been monitoring the cryptocurrency industry since 2016 and has prepared recommendations for its regulation. Some of the hostility towards cryptocurrencies comes from the G20, especially under the leadership of India.
India has taken an anti-crypto stance and is working closely with the G20 in coordinating cryptocurrency policies and regulations.
The FSB recommendations will be finalized by the G20 countries in September and applied as regulations afterwards. The Financial Action Task Force (FATF) has reportedly been pushing countries to permanently ban cryptocurrencies.
India's finance minister applauded the FSB's recommendations, revealing that the FATF was involved in cryptocurrency regulation discussions. The FSB has published three documents with recommendations for cryptocurrency regulation, including a general framework and specific documents for cryptocurrencies and stablecoins.
The general framework is based on the principle of "same risk, same regulation", which calls for equal regulation for cryptocurrencies. The risks will increase if cryptocurrencies interact with the financial system. The G20 has pushed to develop a regulatory framework in collaboration with the IMF. Interaction between cryptocurrencies and the financial system will not be allowed
The principle of "same risk, same regulation" was one of the key principles. The regulatory framework must be high-level, flexible and technology-neutral. They focused on cryptocurrencies in general, not just Bitcoin.
Stablecoins are a concern due to their possible widespread adoption. Its mass adoption could lead governments and central banks to lose control over the currencies used by their citizens.
Regulations focus on safeguarding client assets, disclosure of conflicts of interest, and cross-border cooperation. It is important that FSB members apply these recommendations fully and consistently.
Regulators should create a regulatory framework for cryptocurrencies, identifying existing rules and regulations that may apply to them. Also the importance of examining all activities related to cryptocurrencies that may affect the financial system, avoiding incentivizing traditional institutions to become cryptocurrency projects to avoid scrutiny.
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the FSB's recommendations on cryptocurrency regulation will likely become actual regulations in the next year. Countries that do not align with these regulations will face significant problems. However, some countries will not align and cryptocurrencies will continue to flourish there. Over time, the United States and its allies will embrace crypto as is happening in much of the global South.
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*FSB Global Regulatory Framework for Crypto-asset Activities
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