The International Monetary Fund (IMF) and the Financial Stability Board (FSB) have published a report commissioned by G20 under India’s leadership, outlining a comprehensive framework for regulating crypto-assets like Bitcoin and stablecoins. The paper synthesizes the policy recommendations from both organizations to help countries address the financial stability and integrity risks posed by the rapid growth of crypto-assets.The report argues that crypto-assets could undermine monetary policy effectiveness, increase fiscal risks for governments, and reduce the efficacy of capital flow management measures. It also describes stablecoins as a “significant risk”, stating that global stablecoins (GSCs) may transmit volatility more abruptly than other crypto-assets and may cause significant risk to financial stability.The IMF and FSB call for a multi-pronged policy response to mitigate these macroeconomic and financial stability risks. This includes strengthening monetary policy frameworks, guarding against excessive capital flow volatility, addressing fiscal risks, implementing anti-money laundering standards, and enacting comprehensive crypto-asset regulation.The FSB has additionally developed recommendations to ensure crypto-assets and markets are subject to “same activity, same risk, same regulation”, establishing a minimum baseline countries should meet. The report also recommends that some emerging markets may require additional targeted measures based on country-specific vulnerabilities.The IMF and FSB lay a roadmap for “effective” and coordinated implementation of the crypto-asset policy framework. This includes capacity building beyond G20 members, enhancing global coordination and cooperation, and addressing data gaps in the rapidly evolving crypto-asset ecosystem.The report also underscores the importance of cross-border cooperation, coordination, and information sharing among domestic and international authorities. It proposes that this collaboration will foster efficient and effective communication, information sharing, and consultation, thereby encouraging consistency of regulatory and supervisory outcomes.Furthermore, the report emphasizes the need for authorities to require crypto-asset issuers and service providers to establish a comprehensive governance framework with clear and direct lines of responsibility and accountability. Additionally, it calls for establishing comprehensive, clear, and transparent disclosure standards and identifying financial stability risks arising from interconnections and interdependencies within the crypto-asset ecosystem. The paper will be discussed at the G20 summit in India later this month and can be read in full on the FSB website.
This News Article was automatically generated by Bob the Bot (AI)
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | Global |
| Countries | 🇮🇳 |
| Sentiment | neutral |
| Relevance Score | 9 |
| People | None |
| Companies | International Monetary Fund (IMF), FATF, Financial Stability Board (FSB), International Organization of Securities Commissions (IOSCO), G20 |
| Currencies | US Dollar, Stablecoin, Indian Rupee, Ethereum, Bitcoin |
| Securities | None |
