Summary of document history
An effective regulatory framework must ensure that crypto-asset activities are subject to comprehensive regulation, commensurate to the risks they pose, while harnessing potential benefits of the technology behind them.
Crypto-assets and markets must be subject to effective regulation and oversight commensurate with the risks they pose. Crypto-asset markets are fast evolving and could reach a point where they represent a threat to global financial stability due to their scale, structural vulnerabilities and increasing interconnectedness with the traditional financial system. The rapid evolution and international nature of these markets also raise the potential for fragmentation or arbitrage. Although the extent and nature of crypto-asset use varies somewhat across jurisdictions, financial stability risks could rapidly escalate, underscoring the need for both timely and pre-emptive evaluation of possible policy responses as well as regulatory action where existing requirements apply.
An effective regulatory framework must ensure that crypto-asset activities are subject to comprehensive regulation, commensurate with the risks they pose, while harnessing potential benefits of the technology behind them. Where crypto-assets and intermediaries perform an equivalent economic function to the one performed by instruments and intermediaries in the traditional financial system, they should be subject to regulations in line with the principle of “same activity, same risk, same regulation.”
This report sets out:
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The key issues and challenges in developing a comprehensive and consistent regulatory approach that captures all types of crypto-asset activities that could give rise to financial stability risks;
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Policy initiatives at the jurisdictional and international levels;
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The FSB’s proposed approach for establishing a comprehensive framework.
We welcome comments from the public on our proposals and include a set of questions for this purpose. The FSB encourages all interested stakeholders to participate in the consultation. Responses should be sent to [email protected] by Thursday 15 December 2022. Responses will be published on the FSB’s website unless respondents expressly request otherwise.
The FSB’s proposals, along with the work undertaken by the standard-setting bodies (SSBs), should provide a foundation for greater consistency and cooperation among authorities’ approaches to the regulation and supervision of crypto-asset activities and markets.