FSB and IMF call for comprehensive regulation of crypto sector
- By: James Langton
- September 7, 2023September 7, 2023
- 16:43
iStock.com / gopixa
James Langton
The widespread adoption of cryptoassets poses a potential risk to the stability of the global financial system and could undermine monetary policy, warns a joint paper from the Financial Stability Board (FSB) and the International Monetary Fund (IMF).
In a new report, the FSB and the IMF set out their policy recommendations for guarding against financial stability risks posed by the crypto sector, and concluded that “comprehensive regulatory and supervisory oversight of cryptoassets should be a baseline to address macroeconomic and financial stability risks.”
The report finds that regulation is needed to deal with the macroeconomic risks, threats to monetary sovereignty and the functioning of monetary policy, and prospect of extreme capital flow volatility.
“The collective recommendations provide comprehensive guidance to help authorities address the macroeconomic and financial stability risks posed by cryptoasset activities and markets, including those associated with stablecoins and those conducted through so-called decentralized finance,” the paper said.
Beyond this baseline regulation, the report suggested that emerging markets and developing economies “may want to take additional targeted measures … to address specific risks.”
The report also calls on policy-makers to implement the anti–money laundering and counterterrorist financing standards of the Financial Action Task Force to “address risks to financial integrity and mitigate criminal and terrorist misuse of the cryptoassets sector.”
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