{"id":17019,"date":"2023-02-20T17:59:37","date_gmt":"2023-02-20T17:59:37","guid":{"rendered":"https:\/\/nftandcrypto-news.com\/crypto\/many-stablecoins-fall-short-of-coming-regulatory-recommendations-says-fsb-chair\/"},"modified":"2023-02-20T17:59:41","modified_gmt":"2023-02-20T17:59:41","slug":"many-stablecoins-fall-short-of-coming-regulatory-recommendations-says-fsb-chair","status":"publish","type":"post","link":"https:\/\/nftandcrypto-news.com\/crypto\/many-stablecoins-fall-short-of-coming-regulatory-recommendations-says-fsb-chair\/","title":{"rendered":"Many stablecoins fall short of coming regulatory recommendations, says FSB chair"},"content":{"rendered":"

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Financial Stability Board (FSB) chair Klaas Knot has outlined how the organization plans to address key threats to financial stability this year in a Feb. 20 letter sent to the G20\u2019s Finance Ministers and Central Bank Governors. Crypto assets and decentralized finance (DeFi) had a prominent place on the list of challenges the FSB saw. The G20 ministers and bankers group is meeting Feb. 24-25 in Bengaluru, India.<\/p>\n

The FSB has an \u201cambitious work programme\u201d for finalizing a crypto asset regulatory framework in 2023, Knot said. The FSB is an advisory body created by the G20 and affiliated with the Bank of International Settlements (BIS). It has no enforcement powers.<\/p>\n

The FSB indicated in a Feb. 16 report that it was increasing its attention to DeFi in light of its potential connections with traditional finance. Now, Knot, said, the recommendations in the emerging framework may bode ill for some stablecoins:<\/p>\n

\u201cImportantly, the FSB\u2019s work concludes that many existing stablecoins would not currently meet these high-level recommendations, nor would they meet the international standards and supplementary, more detailed BIS Committee on Payments and Market Infrastructures-International Organization of Securities Commissions guidance.\u201d <\/p><\/blockquote>\n

The guidance released by the BIS and International Organization of Securities Commissions in July extends the \u201csame risk, same regulation\u201d Principles for Financial Market Infrastructures to stablecoins. Those principles were released in 2012 in response to the 2008 financial crisis.<\/p>\n

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FSB provides overview on\u00a0 Future Global Standards for\u00a0 Stablecoins Key Takeaways:<\/p>\n

Stablecoins and other crypto assets are a growing focus for the Financial Stability Board (FSB).<\/p>\n

FSB chair stated, numerous stablecoins now in use wouldn\u2019t comply with the global standards es\u2026 pic.twitter.com\/EG4UM1fyhN<\/a><\/p>\n

\u2014 Web3 Daily (@web3_247) February 20, 2023<\/a><\/p><\/blockquote>\n

After the FSB published its final recommendations for regulatory and supervisory approaches to crypto assets and stablecoins in July, the board will make recommendations for specific standard-setting bodies and monitor their implementation.\u00a0<\/p>\n

Related:\u00a0Financial Stability Board aims to address crypto-related risks following FTX\u2019s collapse<\/em><\/strong><\/p>\n

Knot wrote,\u00a0\u201cThe appropriate regulation of crypto-assets, based on the principle of \u2018same activity, same risk, same regulation\u2019 will provide the beginning of a strong basis for harnessing potential benefits associated with this form of financial innovation while containing its risks.\u201d<\/p>\n

The letter noted that one of the drivers of crypto asset growth was \u201cdissatisfaction with the existing system of cross-border payments.\u201d It added that the FSB will deliver a report on next steps in the G20 roadmap on enhancing cross-border payments at the upcoming meeting. <\/p>\n