FSB Eyes Rapid Rollout of Crypto Regulations in 2023
- Outgoing secretary-general of Financial Stability Board (FSB) stated that the body plans to roll out crypto regulations swiftly in 2023.
- Dietrich Domanski said that the FSB will set a timeline for regulators to discuss and implement its first recommendations on global crypto regulation.
- The body will also outline several areas of the crypto space where policymakers could benefit from “more clarity” before making rules.
- The crypto regulation strategy “shows clearly what the way forward (for crypto) regulation looks like,” said Domanski.
The crypto industry is currently in a sticky mess following the collapse of former multi-billion dollar crypto exchange, FTX. The implosion of the exchange was the last straw for regulators around the globe to converge and target the regulation of these digital assets for investors’ protection. As a consequence, the Financial Stability Board (FSB) has confirmed that it is preparing for a rapid rollout of crypto regulations in 2023.
According to a report from Financial Times, the outgoing secretary-general Financial Stability Board (FSB), an international body that monitors and makes recommendations about the global financial system, Dietrich Domanski, revealed the global body’s intentions regarding crypto assets. Interestingly, in November, the FSB appointed John W Schindler as its new secretary-general who has yet to talk about these incoming regulations.
A criticism of regulators around the globe might’ve been the reason for this rapid development of crypto regulations from the FSB. The report further adds that the international will be working on the regulations and roll them out switfly in 2023. Interestingly, there has been a regulatory vacuum in the crypto space which has allowed crypto firms like FTX to achieve sky-high valuations without a proper business in place.
“One objective of this work plan is precisely to counter a perception that all this (work on cryptocurrency) is disperse and slow and is not focused on a single common goal,” Dietrich Domanski revealed in a statement a day before his five year tenure at FSB ends.
In the coming months, the FSB will set a timeline for global regulators to discuss and implement its first recommendations on global crypto regulation and the financial body will also outline several areas of the crypto space where policymakers could benefit from “more clarity” before making rules. These areas will be inspired by the recent collapse of Sam Bankman-Fried’s crypto exchange FTX and Do Kwon’s stablecoin project, Terra.
Furthermore, as per the outgoing secretary-general, the members of the FSB had a “strong agreement” about the crypto regulation strategy which “shows clearly what the way forward (for crypto) regulation looks like,” more than five years after the FSB began evaluating the sector’s risks.
“Many crypto market participants argue that authorities are hostile to innovation. I would say so far, authorities have been fairly accommodating . . . recent events have reinforced the recognition that it is indeed urgent to address risks,” he said.
Domanski said that the objective of the new crypto guidelines is to regulate the space in such a way that blockchain firms “would be held to the same standards as banks . . . if they provide the same service that banks provide.”
In the light of crypto regulation in the US, the United States Securities and Exchange Commission (SEC) recently issued guidelines asking firms to reveal their exposure to cryptocurrencies and also if they have existing relationships with crypto companies.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
