Crypto: what about the relationship between the CFTC and the SEC?

The Financial Stability Board (FSB) has issued a proposal for an international regulatory framework for cryptoassets. According to this world monetary authority, it is high time to regularize the crypto market, the latter evolving too quickly. It would even pose a threat to global financial stability.

The FSB announces on Twitter the publication of the proposed framework on the international regulation of the crypto market. He hopes to have feedback and recommendations.

Crypto regulation: a proposal focused on 2 essential points

Well-established international coordination… According to the FSB, this would be the sine qua non for fully controlling the cryptocurrency market. Concretely, this financial entity firmly supports that an effective regulatory framework must regularize cryptoassets. This regulatory framework would essentially focus on the risks that crypto activities represent, but not only! It would also exploit the potential benefits of technology.

In this sense, the FSB proposes a framework for the international regulation of activities related to cryptocurrency. This proposed framework has two broad categories of recommendations, developed as stand-alone documents. Nevertheless, they are closely related.

The first recommendations aim to optimize the coherence as well as the exhaustiveness of the regulatory approaches and the monitoring of activities. The same is true for crypto markets. This first category also contains proposals for a framework to strengthen cooperation, coordination and information sharing at the international level.

The second recommendations are revised high-level proposals for:

  • regulations ;
  • the supervision ;
  • oversight of “global stablecoin” agreements.

The goal: to guarantee global financial stability.

FSB Seeks Public Comment on Proposed Recommendations

The recommendations of the FSB are accessible to the general public on its website. They have also been issued for public consultation. Indeed, the FSB encourages all parties concerned to consult the recently published recommendations. A framing note accompanies them. This note is made up of 15 questions divided into 3 sections:

  • Generality;
  • Cryptoassets and crypto markets;
  • Global stablecoins;

The FSB expects all affected entities to review the proposal, issue their views, and respond to the series of questions. Responses should be sent to [email protected] before December 15, 2022. They will then be published on the FSB website.

The rapid evolution of crypto activities and markets worries the Financial Stability Board. Indeed, the growing interconnections between the crypto-asset ecosystem and the traditional financial system would pose a threat to global financial stability. The FSB is aware that without international regulation and coordination, it is impossible to control the impacts of cryptographic activities. This framework proposal is only the first step towards the elaboration of the actual regulations. To be continued…

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