In a recent seminar, John Schindler, the general secretary of the Financial Stability Board (FSB), shed light on the organization’s cautious stance in the wake of the recent approval of spot Bitcoin exchange-traded funds (ETFs) in the United States. The FSB’s 2024 agenda focuses on establishing international standards, ensuring consistent global implementation, and maintaining ongoing monitoring in the ever-evolving world of cryptocurrencies.
Schindler highlighted the challenges posed by the swift changes in the crypto landscape and emphasized the FSB’s three-fold approach for the year. This approach includes setting international standards, ensuring global consistency in implementation, and continuous monitoring. Despite the fresh opportunities presented to institutional investors by the approval of Bitcoin ETFs in the US, Schindler remains circumspect, questioning whether these ETFs might reshape the core dynamics of crypto assets.
As the overseer of the global financial system, the FSB advocates for international standards and uniform regulatory practices for crypto assets. Their regulatory framework, conceived in July 2023, promotes a “same activity, same risk, same regulation” ethos to align crypto activities with traditional finance.
Recent tumultuous events, such as the collapse of the FTX crypto exchange and Terraform Labs’ losses of $60 billion in 2022, have spurred the FSB into action. The 2024 work program includes monitoring the implementation of crypto regulations to prevent similar incidents, with an update slated for the G20 in October.
Beyond crypto regulations, the FSB’s 2024 agenda extends to incident reporting, aiming to streamline the process and enhance consistency in financial institutions’ reporting of incidents. The FSB seeks to improve cyber incident reporting by proposing a standardized format for financial institutions to report incidents, fostering smoother information exchange among authorities.
Looking ahead, the FSB is delving into the realm of asset tokenization, assessing the financial stability implications of existing and planned projects. The organization aims to complete its work on tokenization by 2024, presenting a comprehensive report to the G20. Additionally, a report on the financial stability implications of artificial intelligence (AI) is anticipated in November 2024.
