The Financial Stability Board (FSB), a global body of central banks and regulatory agencies will review its standards for assessing how cryptocurrencies will affect financial stability in the long run.
The new decision was announced by the new FSB Chair, Randal K. Quarles during his inaugural speech at a meeting of central bank governors held in Hong Kong at the weekend.
As it was Quarles first major speaking assignment since assuming the post from Bank of England’s Mark Carney in November 2018, he called on members of the regulatory body to brace itself up to protect global financial stability.
One of the ways he outlined the board could achieve that goal is by charting the course for a new framework that will be “flexible enough to handle a financial system that will continue to evolve over time.”
The new FSB Chair then went on to assert that creating such a regulatory framework would not be easy since “developments like the emergence of crypto-assets may challenge any” that the board defines in the near future.
He, however, reinforced that it is the challenging nature of creating a regulation for cryptocurrencies that makes it all the more important for the FSB to develop a “robust framework.”
To begin the crypto regulatory process, the board has agreed to “undertake a review of its framework for assessing vulnerabilities” with new financial tools such as cryptocurrency.
Such a move would ultimately culminate in a reviewing the FSB’s report in October 2018 that cryptocurrencies currently do not pose a threat to financial stability.
Whatever the FSB’s new findings are will likely affect how G20 member nations will regulate the cryptocurrency industry. As we reported in December, the G20 member nations will release an update about crypto regulation later this year a final report in 2020.
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