The Financial Stability Board (FSB), a G20 body that monitors and coordinates global financial regulation, has warned that there are “worrying gaps” in efforts to regulate the global crypto asset markets. The board emphasized that current frameworks remain fragmented, inconsistent, and insufficient to address the cross-border nature of crypto markets.
Risks Growing as the Market Expands
According to the FSB’s newly released assessment report, the risks posed by crypto markets are “currently limited”, but are increasing as the market expands. With the recent surge in Bitcoin and other digital assets, the global crypto market capitalization has doubled over the past year, surpassing $4 trillion.
FSB Secretary-General John Schindler expressed concern, stating:
“These crypto assets can cross borders much more easily than traditional financial instruments.”
Stablecoins a Key Concern
The report highlighted the lack of adequate regulation for stablecoins — cryptocurrencies pegged to traditional currencies. It noted that almost no country has established a comprehensive regulatory framework for stablecoins, even though the market has grown nearly 75% in the past year, reaching about $290 billion.
Call for Global Coordination
The FSB urged countries to implement comprehensive and globally consistent rules, and to strengthen cross-border cooperation. Schindler warned:
“We can all make our own rules, but when some parties fail to cooperate or assist each other, it becomes very challenging — because these assets know no borders.”
Lessons from Past Collapses
The FTX collapse and the TerraUSD/Luna crisis in 2022 had already spurred regulators worldwide into action. The FSB stressed that coordinated global regulation is essential to prevent similar crises from shaking the crypto industry again.
