G20 to pass global crypto regulations in October

The G20 is preparing to pass a global framework for regulating cryptocurrencies this fall in what could be one of the most important decisions for the sector in the past decade.

The Financial Stability Board (FSB), a body of regulators, central bankers and treasury officials uniting the 20 economies in the group, said on Monday that it’s time to ensure that the “speculative” sector is brought under regulatory oversight.

The new measures are expected to come into force in October, which means that the economies will execute their plan much sooner than anyone could have expected. This decision comes after the European Union announced similar sweeping reforms.

The G20 dismissed fears that cryptocurrencies have posed a systemic risk to global finance, an opinion previously expressed by central banks and even the International Monetary Fund.

However, the recent turmoil involving the culling of billions worth of cryptocurrency value has prompted regulators and financiers into action.

“The failure of a market player, in addition to imposing potentially large losses on investors and threatening market confidence arising from crystallization of conduct risks, can also quickly transmit risks to other parts of the crypto-asset ecosystem”, the FSB said.

The fact that Celsius Network and Voyager Digital have gone through asset freezes and even bankruptcy have been events that made the regulator more inclined to act now.

It all started with stablecoins, the FSB noted, citing the TerraUSD crash that took everyone by surprise.

“FSB members are committed to using the enforcement powers within the legal framework in their jurisdiction to promote compliance and act against violations”, the FSB concluded.

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Source

Updated: 07/11/2022 — 09:00