Financial Stability Board Shares India's Vision to Frame Global Rules for Crypto
While India is still working on its draft of global crypto rules, the FSB said it was finalising its own version of the global regulatory framework for the digital assets sector.
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Written by Radhika Parashar, Edited by Richa Sharma | Updated: 17 July 2023 17:20 IST
Highlights
The World Economic Forum also wishes for global laws to govern crypto
FSB has been working on bringing some laws since last year
FSB’s law focus on overseeing growth and risks around stablecoins
The FSB oversees recommendations about the global financial systems
Photo Credit: Pixabay/ Sergei Tokmakov
The Financial Stability Board (FSB), a body that oversees recommendations about the global financial systems, has called for a global set of rules to govern the crypto sector. The FSB has evidently chimed-in with India's vision as well. Under its ongoing G20 presidency, India has been working with international financial bodies as well as other G20 nations to bring up these regulations that would work in favour of the crypto sector and bring its infamous volatility market under control.
Last year, promising crypto platforms like the FTX crypto exchange and Celsius crypto lender crumbled due to mismanagement of funds. The FSB, which has policy-makers from China, US, UK, and the EU as members, wishes to protect crypto investors from losing their funds.
While India is still working on its draft of global crypto rules, the FSB said it was finalising its own version of the global regulatory framework for the digital assets sector.
“The framework is based on the principle of ‘same activity, same risk, same regulation' and provides a strong basis for ensuring that crypto-asset activities and so-called stablecoins are subject to consistent and comprehensive regulation, commensurate to the risks they pose, while supporting responsible innovations potentially brought by the technological change,” an official release from the FSB said on Monday, July 17.
The FSB had floated ideas about a global framework for crypto in October last year. After receiving feedbacks from stakeholders and the public, the organisation has outlined some pointers in the latest development.
These include supervision and oversight of global stablecoin arrangements (GSCs) and support for responsible innovation. The FSB also wishes to leave a margin for jurisdictions to implement domestic approaches.
“In light of events of the past year, the FSB has strengthened both sets of high-level recommendations in three areas: (i) ensuring adequate safeguarding of client assets; (ii) addressing risks associated with conflicts of interest; and (iii) strengthening cross-border cooperation,” FSB's official release noted.
Several global financial organisations have time and again expressed the need for a set of crypto regulations that would work on an international level.
A recent report published by the World Economic Forum (WEF) emphasised that full global coordination for crypto regulation would be ideal.
Geneva-based WEF, which describes itself as an international organisation for public-private cooperation, also called on industry leaders to continue working on interoperable technical standards and focus on establishing and disseminating best practices.
The International Monetary Fund (IMF) has also been sharing its insights with India as during the G20 presidency, the country continues its efforts to regulate the crypto sector. Development on this front is expected to pace up around December this year.
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