FSB Warns Global Crypto Regulation Lags Amid Market Growth
The Financial Stability Board (FSB) highlighted the need for unified global crypto regulation, noting inconsistent rules across 29 major jurisdictions. This inconsistency poses financial stability risks as crypto assets transcend borders.
Market Growth and Risks
- The crypto market has grown to $4 trillion, doubling in a year.
- Stablecoins have increased by 75% to $290 billion.
- Lack of robust stablecoin regulations globally, despite U.S. efforts like the GENIUS Act.
- Offshore platforms take advantage of weak regulations, potentially causing systemic issues.
FSB's Call for Global Coordination
- Proposed eight measures to standardize regulations and improve cross-border monitoring.
- Building on 2023 reforms to expedite closing regulatory gaps.
- Current risks are limited but growing institutional connections necessitate urgent action.
Urgency Post-Crisis
- Warning follows past collapses, including FTX and TerraUSD/Luna in 2022.
- Recent $20 billion market drop highlights shortcomings in national policies.
- Emphasis on harmonized global frameworks to manage digital asset spillovers effectively.