The Financial Stability Board explained that crypto platforms must separate customers’ digital assets from their own funds to avoid conflicts of interest.
Cryptocurrencies: new guidelines from the FSB
The Financial Stability Board (FSB or Financial Stability Board) is an international organization that monitors the global financial system. The organization recently proposed a global regulatory framework for cryptocurrencies and recommended guidelines for G20 are based on the following principle: “same activity, same risk, same regulations”.
A note and two separate documents were delivered publics July 17. The document consists of two sets of recommendations: recommendations for the regulation of cryptocurrencies in general and recommendations for a potential “stablecoin mondial“. This means that the stablecoins could be used in several different jurisdictions.
The FSB says cryptocurrency platforms must separate customers’ digital assets from their own funds and clearly separate certain features to avoid conflicts of interest. Regulators also need to ensure close cross-border cooperation and oversight. The international body is rather open to questions of privacy, but asks local regulators to ensure that there is no activity that “could prevent the identification of the responsible entity or affiliated entities. ”. She points directly to the decentralized finance (DeFi) protocols.
Authorities should have access to data where necessary and appropriate to fulfill their regulatory, supervisory and supervisory mandates.
Our global regulatory framework for crypto-asset activities seeks to ensure that #cryptoassets and global #stablecoins are subject to robust regulation and supervision and do not pose risks to #FinancialStability.
Find out more: https://t.co/NZyA2rzF7K pic.twitter.com/wH8z4Q0d8l
— The FSB (@FinStbBoard) July 17, 2023
Towards a global stablecoin?
When it comes to “global stablecoins”, the FSB insists that any stablecoin issuer must have one or more identifiable and responsible legal or natural persons, which it calls “governing body”. It specifies that issuers must hold reserve assets with a minimum ratio of 1:1unless the issuer “is subject to specific prudential requirements” equivalent to the standards of commercial banks.
What is new, however, is the potential requirement for issuers of “global stablecoins” to obtain a license to practice in each jurisdiction. Some guidelines specify that:
Authorities should not allow a GSC arrangement to be implemented in their jurisdiction unless that arrangement meets all of their jurisdiction’s regulatory, supervisory and oversight requirements.
The FSB will review the progress of the implementation of its recommendations worldwide by the end of 2025. In collaboration with the International Monetary Fund, it will submit to the G20 in September 2023 a joint report on existing policies and regulatory issues. At the beginning of July, the Association for Financial Markets in Europe spoke out on the FSB’s position, urging European Union lawmakers to include DeFi in Europe’s first cryptocurrency framework.
Source : Cointelegraph
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