- Cryto sector fast evolving: FSB Chairman
- Knot says some tokens employed by criminals in illicit activities
The Financial Stability Board (FSB), has raised concerns that the cryptocurrencies can harm the monetary network in the future as the sector is “fast-evolving,” and some of the tokens are employed by criminals in illicit activities.
FSB is an international agency coordinating the work of national financial authorities and international standard-setting bodies in seeking consistent financial sector policies.
The rapid evolution and the international nature of these markets also raise the potential for regulatory gaps, fragmentation, or arbitrage.FSB Chairman Klaas Knot
“For these reasons, policy work on crypto assets is a priority for the FSB,” he said.
The economist argued that Bitcoin and other tokens could operate under the radar of regulators, and as such, cybercriminals could facilitate illegal transactions with them.
He believes the Russia-Ukraine war has “reinforced” the assumption that crypto plays a role in money-laundering, ransomware, and cyber-crime.
FSB to establish comprehensive rules on crypto markets
Klaas further said that one of FSB’s primary goals will be to establish comprehensive rules on the market, especially on “unbacked” cryptocurrencies and stablecoins.
Besides, the institution will aim to impose a regulatory framework on the decentralized finance sector by collaborating with governmental organizations such as the Financial Action Task Force.
“Thanks to its broad international and cross-sectoral membership, including the sectoral standard settler, the FSB is well-placed to take a leading role in the design of a coherent framework for crypto assets,” he said.
This is not the first time FSB has warned about the fast-evolving nature of the crypto-assets.
Earlier in February, FSB had published a report that said, “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.”
At that time, the organization had reiterated that it will continue to monitor developments and risks in crypto-asset markets and explore potential regulatory implications of unbacked crypto-assets.
Contributors
