'Robust' Global Crypto Rules To Be Proposed By G20 Watchdog In October

The Financial Stability Board said that stablecoins need to be subject to robust regulation if they are to be used as a means of payment.

FSB comprises treasury officials and central bankers from the G20 forum.

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The recent turmoils in the global crypto market have left many organisations and government bodies calling for the need to regulate the speculative sector. Under this backdrop, the Group of Twenty (G20) watchdog Financial Stability Board (FSB) said on July 11 that it plans to propose a set of “robust” global rules for cryptocurrencies in October. The crypto market has been facing an unprecedented meltdown since May this year, starting with the de-pegging of the TerraUSD stablecoin. This eventually led to LUNA losing nearly all its value and the Bitcoin (BTC) price plunging to as low as $18,000 last month. 

Interestingly, the FSB has so far limited itself to monitoring the crypto sector, saying that it didn’t pose a systemic risk, as reported by Reuters. However, owing to the recent market upheavals, cryptocurrencies’ volatility, structural vulnerabilities, and growing links to the wider financial system have been highlighted, as per the FSB.

For those unaware, the FSB comprises treasury officials and central bankers from the G20 forum. While the FSB has no lawmaking powers, its members do commit to applying its regulatory principles in their own jurisdictions.

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

Commenting on the TerraUSD meltdown, the FSB said that stablecoins need to be subject to robust regulation if they are to be used as a means of payment. It also added that crypto-assets are primarily used for “speculative purposes” but don’t operate in a “regulation-free space.”

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