Cryptocurrencies Will Affect Global Financial Stability; FSB Official Says
At the Institutional Digital Assets and Crypto Regulation Symposium organised by City and Financial Global and held in London, Steven Maijoor, the chair of the Financial Stability Board working group for crypto assets, talks about the need for a globally recognised regulatory frame and discussed the need to devise a framework that will serve as a regulatory framework for cryptocurrencies.
Crypto Faces The Threat Of Collapsing
Following the collapse of FTX, one of the biggest crypto exchanges, economic experts have come forward to express their opinions on a number of crypto-related issues. One of these experts is Steven Maijoor, the chair of the Financial Stability Board’s working group for crypto assets.
The international organisation, composed of powerful economies and organisations like the International Monetary Fund, oversees and recommends norms for the global financial system.
Steven Maijoor criticises the current state of the cryptocurrency industry, saying that inasmuch as the crypto markets are expanding quickly and still have design deficiencies as well as insufficient regulations and management, they will eventually arrive at the point where they will pose a threat to the integrity of the worldwide financial system.
Maijoor said that it is frequently impossible to determine which players in the crypto space have nefarious motives and which platforms are at risk of overreaching because of the significant levels of market distortion that define many crypto marketplaces.
The chair of the Financial Stability Board working group for crypto assets, Steven Maijoor, further explained that since crypto is permissionless and cuts across all of the globe, it creates a great degree of threat and concern for its supervision.
He stressed the need for regulatory frameworks that are quite uniform to ensure adequate financial supervision.
FSB Recommends a Framework for International Regulation of Crypto
The FSB had earlier made public a proposed framework for the international regulation of cryptocurrency-related activity globally.
This report, released on the 11th of October, 2022, recommended several ways to ensure the administration, management, and regulation of stablecoins, among many other things, to stabilise the financial risks associated with crypto.
Also, a number of measures to promote the coherence and effectiveness of regulatory, supervisory, and oversight approaches to crypto-asset activities and the market were shared.
For public comment, the suggested recommendations were released. Public feedback on the suggested recommendations is being sought by the FSB. To this end, a list of questions is included in the framework note, and all interested parties are encouraged to participate in the consultation, according to the FSB.
It is no doubt clear that the FSB will no longer sit and watch the state of crypto deteriorate. The crypto industry might be about to witness quite a major shift.
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