With the boom in the cryptocurrency economy, major international regulators are now focusing on streamlining policies in many crypto-related areas including investor protection, market integrity, and anti-money laundering.
The prospect of the regulators was outlined in a recent report by the Financial Stability Board (FSB) which it is going to table on the upcoming G20 summit before finance ministers and central bank governors.
The report detailed that the Basel Committee on Banking Supervision (BCBS) is working to bring policy and supervisory initiatives related to crypto assets and is focused to strengthen regulation, supervision, and practices of banks across the globe.
The supervisory body is monitoring various banking developments related to crypto and is also clarifying the prudential treatments for banks exposed to digital assets.
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The Committee for Payments and Market Infrastructures (CPMI), on the other hand, is focusing on innovations in blockchain-based payments, and clearing and settlement systems.
“Over the past several years, the CPMI has been closely monitoring implications of digital innovations, including digital currencies, tokenization and distributed ledgers,” the report detailed. “To that end, the CPMI has been developing analytical reports and frameworks to aid central banks in their assessments, frequently partnering with other SSBs and central bank committees.”
Concerns around crypto
Though many bodies are working on the adaptation of crypto assets, others are more skeptical and raised concerns about the impact of digital currencies on financial stability.
The International Organization of Securities Commissions (IOSCO) is worried about the impact of cryptocurrencies on trading, custody, and clearing and settlement. It has also raised concerns about their impact of cryptocurrencies on investment funds.
In a report last year, the FSB concluded that cryptocurrency poses a number of potential threats to financial stability. A similar concern was also echoed by the Basel Committee, which earlier this year warned banks against their exposure to digital assets.