The G20 plans to develop rules for the regulation of cryptocurrencies by October this year
Economy

The G20 plans to develop rules for the regulation of cryptocurrencies by October this year

The Financial Stability Board (FSB) is a group of central bankers and treasury officials from the G20 countries. It works to establish global guidelines for cryptocurrencies.

 

The rules will mainly focus on managing stablecoins. This was especially important after the collapsed Terra ecosystem.

“Crypto assets including stablecoins are rapidly evolving. According to the organization, the recent turmoil in digital currency markets has highlighted their inherent volatility, structural vulnerabilities and the challenge of increasing interconnectedness.

The FSB stated that losses from cryptocurrency investors could “infect” traditional financial markets such as the spheres of short-term lending.

The experts at the organization believe that crypto assets should be subject to effective regulation in proportion to the risks they present, both at the external and internal levels.

According to the FSB, digital assets can be regulated and governed by existing rules and regulations in financial markets.

The FSB specialists stressed that cryptocurrencies are primarily used for speculation and should not be considered as financial guarantees. Participants in transactions should therefore be aware of these risks.

They stated that they would present a “robust strategy to the regulation, oversight, and supervision of stablecoins & other crypto assets” in Oct.

Although the Council doesn’t have any legislative mandates to follow, the Council and its member states could be obligated to implement the rules. The International Organization of Securities Commissions is also collaborating with the Council to develop a global regulation plan by next year.

The G20 plans to develop rules for the regulation of cryptocurrencies by October this year
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