On 11 October 2022, the Financial Stability Board (FSB) published a consultative report which sets out a number of proposed recommendations to promote the consistency and comprehensiveness of regulatory, supervisory and oversight approaches to crypto-asset activities and markets intended to strengthen international cooperation, coordination and information sharing. The recommendations apply to any type of crypto-asset activities and associated issuers, service providers (including intermediaries such as crypto-asset trading platforms) that may pose risks to financial stability.
The FSB has also published a consultative report regarding a review of its high-level recommendations of October 2020 for the regulation, supervision, and oversight of global stablecoin arrangements. The revised recommendations emphasise the need for authorities to be ready to apply relevant regulations to any stablecoins that could become a global stablecoin arrangement. They include guidance to strengthen the governance framework by clearly defining the responsibilities of the actors and the redemption rights of single fiat-referenced global stablecoins by requiring these stablecoin issuers to provide robust legal claim, guarantee timely redemption at par into fiat, and maintain effective stabilisation mechanisms, among other revisions. The revised recommendations clarify that reliance on algorithms and arbitrage activities are not effective stabilisation mechanisms and therefore many existing stablecoins would not meet the FSB’s high-level recommendations.
The FSB is soliciting comments on both reports until 15 December 2022. The FSB will finalise the recommendations by mid-2023 in light of the feedback received.