According to CoinDesk, the Financial Stability Board (FSB)—comprising regulators from over 20 jurisdictions including the U.S., EU, China, and the UK—has called for stricter cryptocurrency regulations. The proposed rules, based on the International Framework for Crypto-Asset Regulation published in October, could force major crypto conglomerates to segregate certain business functions if enacted.
FSB Advocates for Tighter Global Crypto Regulations
The FSB's recommendations aim to ensure "consistent and comprehensive" oversight, targeting practices like client fund misappropriation and token price manipulation observed in collapses like FTX and Celsius. Key points include:
"Events of the past year highlight the inherent volatility and structural vulnerabilities of crypto-assets and related entities."
"New rules may require large crypto firms to separate specific operations."
Why Stricter Rules?
The FSB cites recent crises—such as the failure of crypto-friendly U.S. banks, the temporary depegging of USDC, and TerraUSD's 2022 crash—as catalysts for tighter oversight.
Divergent Global Approaches to Crypto Regulation
EU’s MiCA vs. U.S. SEC Stance
- EU: The Markets in Crypto-Assets (MiCA) law, enacted in May, provides a comprehensive framework covering token offerings, stablecoins, and crypto services.
U.S.: The SEC argues existing traditional finance regulations suffice. FSB Secretary-General John Schindler echoed this view:
"Crypto activities aren’t fundamentally different from traditional finance and should follow similar rules."
Implications
The FSB’s alignment with the SEC suggests future policies may prioritize integration with traditional financial oversight rather than creating crypto-specific regimes.
FAQs
1. What is the Financial Stability Board (FSB)?
The FSB is an international body that monitors and makes recommendations about the global financial system, including cryptocurrency markets.
2. How will the new regulations affect crypto companies?
Large firms may need to legally separate business units (e.g., exchanges from custody services) to prevent conflicts of interest.
3. What triggered the FSB’s push for stricter rules?
Failures like FTX, Celsius, and TerraUSD demonstrated systemic risks in crypto markets, prompting demands for standardized safeguards.
4. How does MiCA differ from the FSB’s approach?
MiCA creates crypto-specific rules, while the FSB leans toward adapting existing financial regulations for crypto.
5. When will the FSB’s framework take effect?
A finalized version is expected after October, with implementation timelines varying by jurisdiction.
👉 Explore how global crypto regulations are evolving
👉 Learn about MiCA’s impact on EU markets