Regulators came late to the fast evolving cross-border world of cryptoassets but they could come up with their first global framework of rules within months.
The Financial Stability Board, which groups regulators, central banks and finance ministry officials from the G20 economies, is looking at what needs to be done with crypto-assets such as bitcoin and stablecoins.
The G20 includes Asia-Pacific members Australia, China, India, Indonesia, Japan and South Korea, as well as Argentina, Brazil, Canada, France, Germany, Italy, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the UK, US and the European Union.
Crypto assets are currently treated differently across the world, ranging from bans to no rules at all, even though they are traded by international firms.
The European Union is approving a comprehensive set of standards for authorising and supervising participants in crypto asset markets.
Robert Ophèle, chair of the Autorité des Marchés Financiers, France’s markets watchdog, and a member of the FSB, said regulators were following the “universal basic principle” of same rules to cover the same risks.
‘Regulatory Convergence’
“I do expect that for some of them, we do have international regulatory convergence… primarily stablecoins and digital asset service providers,” Ophèle told a webinar held by Afore Consulting.
Regulators were behind the curve because cryptoassets were not yet a threat to financial stability, but this was now top of the FSB’s agenda, he said.
“I do think we could achieve, deliver on these issues in the next few quarters… the FSB is going full steam on this issue.”
The FSB has no powers to make binding rules, but its members commit to introducing its regulatory principles into their own national rulebooks.
Regulators are also trying to catch up with other parts of a rapidly digitalising financial market, such as social media and smartphones becoming more heavily used by retail investors to buy and sell shares.
EU securities watchdog ESMA is scrutinising “finfluencers” or social media influencers who give stock tips without safeguards on their credibility, its chair Verena Ross told the webinar. “This fast moving phenomenon requires active monitoring,” she said.
The EU needed a powerful watchdog for markets like the European Central Bank is for banking, Ophèle said. “The current structure is no longer fit for purpose.”
- Reuters, with additional editing by George Russell
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