The G20 Financial Stability Board (FSB) is rolling out a series of recommendations for crypto and stablecoin policies in an effort to address the international regulatory loopholes in the sector.
The crypto recommendations are designed to establish a “global regulatory baseline” after last year’s high-profile Terra (LUNA) and FTX implosions upset the digital asset industry.
The FSB stimulates cross-border cooperation, coordination and information exchange between different governments. The international body also recommends that domestic regulators require crypto-asset issuers and service providers to disclose their governance frameworks.
“The governance framework should be proportionate to their risk, size, complexity and systemic relevance, and to the financial stability risk that may arise from activities or markets in which the crypto asset issuers and service providers participate. It should provide clear and direct lines of responsibility and accountability for the functions and activities they perform.”
The FSB also suggests that regulators require crypto companies to implement comprehensive risk management and secure data collection frameworks. In addition, the Council recommends that authorities monitor the connections between the crypto ecosystem and the rest of the traditional financial world to address any risks to financial stability that such connections may pose.
The FSB has also issued similar regulatory recommendations for stablecoins.
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