The Financial Stability Board will hold crypto providers to the same standards as banks

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The Financial Stability Board (FSB), the world’s largest financial services regulator, has said it is set to hold crypto firms to the same standards as banks…if they provide the same service as the banks.

A spokesperson for the global watchdog told the Financial Times that it is set to establish a new set of international rules governing cryptocurrencies in early 2023, which would then be implemented by local governments. .

The FSB was created in 2009, directly after the 2008 credit crisis. The Swiss organization monitors and makes recommendations on the global financial system alongside organizations such as the International Monetary Fund, the World Bank and the Organization world trade.

In terms of specific areas of interest, Dietrich Domanski, secretary general of the FSB, said there could be regulations governing where there is a combination of different activities that are traditionally kept separate.

He said the new framework could include rules to clarify governance arrangements, ensure transparency and protect customer funds in the event of a run, where consumers rush to withdraw their funds all at once.

The regulator claimed that keeping crypto firms to such standards would have avoided disasters such as the FTX scandal and the collapse of Terra Luna earlier this year, which led to historically low prices for cryptocurrencies. currencies and relevant service providers.

Domanski stressed that his organization will try to act with some urgency when implementing these guidelines, saying that: “I don’t think we would be talking about a decade, adding that that period would be far too long.

He said crypto regulation was one of the FSB’s primary goals, alongside climate regulation and non-banking regulation.

The executive also defended his organization against accusations that it had moved slowly in the past, saying he would invite them to follow a process of global cooperation and then tell him that the FSB could have acted more quickly.

FSB regulations and the global community

The move towards a solidified set of global regulations comes as many regions are now clarifying their rules governing crypto assets.

The EU recently instituted a new set of rules governing the taxation of crypto assets as part of a much broader set of tax regulations, which will require businesses of any size dealing with crypto transactions to declare them for tax purposes. .

The UK government, as part of a largely liberal package of new financial regulations, has extended tax breaks for investment managers turning to crypto as part of a package of more than 30 reforms.

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