G20 Regulator FSB Announces 'Robust' Crypto Regulatory Rules in October

This article comes fromDecrypt, original author: Andrew Asmakov

Odaily Translator | Nian Yin Si Tang

, original author: Andrew AsmakovAnnounceOdaily Translator | Nian Yin Si Tang

The Financial Stability Board (FSB) today

Announce

, which will come up with its own rule proposals to ensure "robust regulation" of cryptocurrencies.

The group, which includes G20 finance officials and central bank governors, said it would report to G20 finance ministers and central bank governors in October outlining its approach to regulation and oversight of stablecoins and other crypto assets.

The group added that the failure of even a single market participant would not only "incur potentially large losses for investors and threaten market confidence," but also "quickly transmit risk to the rest of the cryptoasset ecosystem."

Following the dramatic collapse of the Terra ecosystem in May, several well-known crypto lending firms and hedge funds faced liquidity crises and eventually went bankrupt. This comes at a time when the FSB has also become increasingly aware of the risks in this area.

Notably, this is also the first time the FSB has proposed specific rules in the crypto space — although the organization has been closely monitoring the industry, no action has been taken so far.

secondary title

Crypto Community Reacts to G20 Proposal Mixed

The cryptocurrency community has had a mixed reaction to the news about the upcoming regulations.

“Regulation in the crypto space has always been questioned because it is inconsistent with the basic principles of freedom and decentralization that the industry preaches,” Pedro Herrera, senior blockchain analyst at DappRadar, told Decrypt.

While some might see the imposition of clear rules as a “springboard to mainstream acceptance and adoption,” for many cryptocurrency hardliners, “regulation will stifle creativity and limit freedom,” Herrera said.

"It should be noted that while regulation does not guarantee that the market is free from fraud, it does create barriers for many criminals to take advantage of this space." premature.

Kene Ezeji-Okoye, co-founder of Millicent, the first stablecoin and CBDC project to be funded by the UK government’s research and innovation department, believes that the FSB’s upcoming proposal needs more details.

"While some form of regulation would undoubtedly make the field safer and allow for more 'everyday' adoption, over-regulation could easily cripple the industry, so seeing the FSB calling for 'sound' global rules - without knowing it What those rules might be — that's kind of a concern," Ezeji-Okoye said.

According to him, “The problem with trying to write an all-encompassing crypto rulebook is that by the time the book is published, the field may have changed significantly.”

Nonetheless, Ezeji-Okoye acknowledged that the events of the past few months have made it clear that stablecoins are “an area that needs to be fully regulated.”

“For digital currencies to become mainstream, stablecoins must gain public trust and be fully fungible with other types of public and private currencies. The only realistic way for this to happen is through a shared regulatory framework,” Ezeji- Okoye added.

Meanwhile, Joseph Collement, legal counsel for Bitcoin.com, is less confident that the FSB's regulations will have a positive impact on the bitcoin industry.

“Since 2018, regulators have realized that companies like Celsius are bogus banks without FDIC insurance. Yet, they fail to protect consumers. The FSB regulations come too late and may not help the industry as a whole,” Collement told Decrypt.