Firms say the FSB should enforce tough crypto rules

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Traditional financial firms have reportedly urged the Financial Stability Board (FSB) to enforce strict rules for the cryptocurrency sector.

The companies said so in response to the FSB’s invitation to comment on its proposed international crypto regulations aimed at promoting financial stability and consumer protection, CoinDesk reported on Wednesday, January 4.

On Wednesday, the FSB published more than 40 public responses to its draft framework for the international regulation of crypto-asset activities.

On the web page where they are published, the FSB said that the framework includes recommendations for the regulation, supervision and monitoring of crypto-asset activities and markets and global stablecoin agreements.

According to the CoinDesk report, some of the public comments suggested expanding the regulatory perimeter, clarifying how to segregate and protect client assets, and requiring segregation of activities by applying the same standards applied to financial players. traditional.

Some crypto firms submitting public comments have warned the FSB of the potential for slowing innovation. They said crypto risks require bespoke regulation, and combined services enable real-time settlement without significant additional risks.

When releasing public comments, the FSB said it plans to release its final reports in July.

The FSB said on Dec. 6 that it is stepping up its oversight of crypto-assets and decentralized finance (DeFi) and enhancing it to include DeFi-specific vulnerability indicators.

The group also discussed at a Dec. 5-6 meeting broader crypto-asset markets and determined that while financial stability risks from turbulence in those markets remain limited, that could change as Links between crypto-asset companies and major financial markets and institutions continue to grow.

FSB members stressed the importance of addressing the potential of crypto trading platforms for risk concentrations, conflicts of interest, and misuse of client assets.

A few weeks earlier, on November 17, the head of the FSB’s task force on crypto assets, Steven Maijoor, said during a speech that the current turmoil in the cryptocurrency world had given the FSB a new reason to develop regulations for the industry and that the rapid growth of the crypto market, coupled with structural vulnerabilities and a lack of regulation means that they will soon reach a point where they pose a threat to stability of the global financial system.

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