Crypto Framework: Global regulators go full throttle to tame digital assets
Regulators are late to the rapidly evolving cross-border world of cryptocurrency assets, but could come up with their first global framework of rules within months, a senior official said Wednesday.
The Financial Stability Board, which brings together regulators, central banks and finance ministry officials from G20 economies, is looking at what to do with cryptocurrency assets such as bitcoin and stablecoins.
Cryptocurrency assets are currently treated differently around the world, ranging from bans to no rules at all, even though they are traded by international firms. The European Union approves a comprehensive set of standards for licensing and supervising participants in cryptocurrency asset markets.
Robert Ophele, chairman of the AMF and member of the FSB, said regulators followed the “universal basic principle” of the same rules to cover the same risks.
“I expect for some of them we will have international regulatory convergence…mainly stablecoins and digital asset service providers,” Ophele said during a webinar hosted by Afore. Consulting.
Regulators were lagging behind because cryptocurrency assets were not yet a threat to financial stability, but it was now high on the FSB’s agenda, Ophele said.
“I think we could achieve, deliver on these issues over the next few quarters…the FSB is working full steam ahead on this issue,” Ophele said.
The FSB does not have the power to establish binding rules, but its members undertake to introduce its regulatory principles into their own national rules.
Regulators are also trying to catch up with other parts of a rapidly digitizing financial market, such as social media and smartphones increasingly used by retail investors to buy and sell stocks.
The EU’s securities watchdog, ESMA, reviews “finfluencers” or social media influencers who give stock advice without guarantees on their credibility, its chair Verena Ross told the webinar.
“This rapidly evolving phenomenon requires active monitoring,” she said.
The EU needed a strong watchdog for the markets like the European Central Bank is for the banking sector, Ophele said.
“The current structure is no longer fit for purpose with the development of cross-border digital marketplace business,” Ophele said.
Cryptocurrency is an unregulated digital currency, which is not legal tender and is subject to market risk. The information provided in the article is not intended to be and does not constitute financial advice, business advice or any other advice or recommendation of any kind offered or endorsed by NDTV. NDTV shall not be liable for any loss resulting from any investment based on any perceived recommendation, forecast or any other information contained in the article.
