The Financial Stability Board (FSB) today, urged regulators to heighten risk assessments for the cryptocurrency industry.
The call by the watchdog which was first reported by Reuters relies on the fact that most of the current rules for the industry are patchy, and may incur gaps to the policies on digital money if technological advancements continue.
The FSB issued the warning in its report for G20 Finance Ministers and Central Bank Governors, highlighting that regulators should work to foresee possible risks in the growing cryptocurrency industry that can lead to financial instability.
To be clear, the FSB recognized the efforts of international bodies, including the Basel Committee on Banking Supervision (BCBS) and the Organisation for Economic Co-operation and Development (OECD), to ensure investor protection for crypto users.
The agency, however, asserted that despite those efforts, “money laundering and financial stability, rules vary across jurisdictions.”.
In the near future, the FSB predicted that quick technological changes certainly imply that “risks associated with crypto-asset markets and the level of significance of potential regulatory gaps will keep evolving.”
To solve the problem, the members – national authorities responsible for financial stability and other bodies – were of the view, if at all more international coordination is needed, the FSB suggested.
Another suggestion by the Financial Stability Board is that regulators check the exposures of banks’ and other financial companies to digital money, though, the current scope does not present a material stability risk.