FSB publishes report on ongoing work to address crypto-asset risks

The Financial Stability Board (FSB), an international body monitoring the global financial system, has published a report on crypto-assets focused on the ongoing work, regulatory approaches and potential gaps.

The report, entitled “Crypto-assets: Work underway, regulatory approaches and potential gaps,” provides an update on the work by a number of international organizations including the Basel Committee on Banking Supervision (BCBS), Committee on Payments and Market Infrastructures (CPMI), International Organization of Securities Commissions (IOSCO), Financial Action Task Force (FATF), Organisation for Economic Co-operation and Development (OECD), and the FSB.

These organizations are working to address various issues associated with crypto-assets including investor protection, market integrity, anti-money laundering, bank exposures and financial stability monitoring. They are closely watching the ongoing developments in these areas, setting supervisory expectations for firms, and clarifying how international standards apply to crypto-assets.

Speaking of potential gaps, the report says that they may arise in instances where “such assets are outside the perimeter of market regulators and payment system oversight” and the lack of international standards or recommendations.

“Assessing the significance of potential gaps is challenging, given the rapidly evolving nature of the crypto-asset ecosystem and related risks,” the FSB said. “A forward-looking approach to monitoring crypto-assets can help provide a basis for identifying potential gaps and areas that should be prioritised or focused on.”

The FSB concluding the report recommending the G20 to keep the topic of regulatory approaches and potential gaps, including the question of whether more coordination is needed, under review.

In April, the FSB published a crypto-assets regulators directory in order to provide information on the relevant regulators and other authorities in FSB jurisdictions and international bodies who are dealing with crypto-asset issues.

More recently, IOSCO announced that it was seeking feedback on a consultation paper on regulating crypto-asset trading platforms (CTPs).