The Financial Stability Board (FSB) released its statement on the future global Crypto regulation system and noted that existing stablecoins might fail to meet the standards created by the FSB agency.
The FSB is an international financial agency that oversees and provides guidance on the stability and resilience of the international financial system. FSB was initially created by the G20 countries in 2009 under the name Financial Stability Forum, just after the 2008 financial crisis. In the present time, this watchdog is working on a global crypto regulation framework to prohibit the involvement of bad actors in the space. At present, the Indian finance ministry is working with the other countries’ watchdogs to bring Global regulation on this innovative sector, as a part of G20 meetings. In short, India is trying to bring global regulation on the crypto sector with the help of the FSB agency.
On 20 Feb 2023, The FSB agency published its report on its ongoing development works to bring its global regulatory framework in this year.
The financial Watchdog noted that a strict regulation system is mandatory on this sector because already several incidents in the crypto market showed that the failure of one crypto company resulted into failure of other multiple crypto companies e.g FTX bankruptcy occurred with the bankruptcy & failure of dozen of dominant crypto platforms.
The most important thing on which the FSB agency shared its report is the failure of the majority of the stablecoins to fit into its regulatory standard. According to FSB, the majority of the stablecoins failed to meet the regulatory criteria of its global regulatory framework.
“Importantly, the FSB’s 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 Commission’s guidance,” the FSB added.
The FSB agency is working strictly to overcome all the possible risks associated with stablecoins and enhance the rights of stablecoins users to redeem easily.
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