Representations of cryptocurrencies Bitcoin, Ethereum, DogeCoin, Ripple, Litecoin are placed on PC motherboard in this illustration taken, June 29, 2021. REUTERS/Dado Ruvic/Illustration/File Photo
LONDON, July 11 (Reuters) – The Financial Stability Board (FSB) said on Monday it would propose "robust" global rules for cryptocurrencies in October, following recent turmoil in markets that has highlighted the need to regulate the "speculative" sector.
The FSB, a body of regulators, treasury officials and central bankers from the Group of 20 economies (G20), has so far limited itself to monitoring the crypto sector, saying it did not pose a systemic risk.
But recent turmoil in crypto markets has highlighted their volatility, structural vulnerabilities and increasing links to the wider financial system, the FSB said.
"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," the FSB said in a statement.
The value of bitcoin , the largest cryptocurrency, has slumped some 70% since its November record of $69,000 and was trading at $20,422 on Monday, leaving many investors nursing losses.
TerraUSD stablecoin collapsed earlier this year, and withdrawals and transfers from major crypto firms Celsius Network and Voyager Digital have rattled markets.
Stablecoins should be captured by robust regulation if they are to be used as a means of payment, the FSB said.
"The FSB will report to the G20 Finance Ministers and Central Bank Governors in October on regulatory and supervisory approaches to stablecoins and other crypto-assets," the FSB said.
The FSB has no lawmaking powers but its members commit to applying its regulatory principles in their own jurisdictions.
The watchdog is lagging the European Union, a leading member of the FSB, which agreed comprehensive new rules for the crypto market this month. read more
The FSB said cryptoassets are predominantly used for "speculative purposes" but don't operate in a "regulation free space" and must comply with relevant existing rules.
Many countries require crypto firms to have anti-money laundering controls.
"FSB members are committed to using the enforcement powers within the legal framework in their jurisdiction to promote compliance and act against violations," the FSB said.
Our Standards: The Thomson Reuters Trust Principles.
The world's largest crypto exchange, Binance, continued to process trades by clients in Iran despite U.S. sanctions and a company ban on doing business there, a Reuters investigation has found.
Reuters, the news and media division of Thomson Reuters, is the world’s largest multimedia news provider, reaching billions of people worldwide every day. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers.
Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology.
The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs.
The industry leader for online information for tax, accounting and finance professionals.
Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile.
Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts.
Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks.
All quotes delayed a minimum of 15 minutes. See here for a complete list of exchanges and delays.
© 2022 Reuters. All rights reserved
Related Posts
