FSB Plans to Focus on Asset Tokenization and Crypto Regulation by 2024, Reveals Letter to G20
Summary:
Klaas Knot, chair of the Financial Stability Board (FSB), has highlighted various challenges to global financial stability in a letter to G20 finance ministers and central banking representatives. The FSB's strategy includes focusing on asset tokenization and producing reports on the impact of asset tokenization and artificial intelligence on financial stability by 2024. The G20's crypto-assets supervision guideline was approved last year. The FSB aims to publish an update on the execution of their crypto-assets roadmap in October, and plans to address Anti-Money Laundering and Know Your Customer regulations in global payments. The G20 consists of 19 countries, the EU, and the African Union with Brazil holding the current presidency.
The global financial stability landscape continues to be fraught with hurdles, as highlighted by Klaas Knot, chair of the Financial Stability Board (FSB), in a letter to the G20 finance ministers and central banking representatives. Ahead of their upcoming meet in São Paulo on February 28-29, the FSB divulged its strategy, with a specific focus on asset tokenization. The FSB letter, drafted on February 20 and made public on February 26, underscored key areas like non-banking financial intermediation, digital innovation, climate change, and global payments, among others. "By 2024, our focus will be on providing reports concerning the impact of asset tokenization and artificial intelligence on financial stability," Knot mentioned, referring to the planned action on cryptocurrency. The G20's universal guideline on crypto-assets supervision was approved in 2021. The G20 Crypto Assets Roadmap was established in October, based on the G20 New Delhi Leaders’ Declaration given in July. The FSB and the International Monetary Fund worked together on the Synthesis Paper in which the roadmap was suggested. The FSB vowed to publish an update on the execution of the roadmap in October. It also intends to suggest a method for reporting incidents to multiple financial institutions and agencies simultaneously. The letter emphasized the potential of an interconnected global financial network. It warned, "This intensifies the possibility of a security fault at one financial entity causing ripples across the globe and affecting multiple sectors". Proposals for global information exchange frameworks, such as the G20’s framework for reporting crypto-asset taxes unveiled in October, were also hinted at by the letter. The FSB plans to tackle Anti-Money Laundering and Know Your Customer in the context of global payments.
The G20 encompasses 19 nations, the European Union, and the African Union. Brazil succeeded India as the G20's president this year, with India being the first to stress the necessity for international regulations on cryptocurrency. South Africa will assume the presidency of the G20 in 2025. The FSB, which operates independently under the Bank for International Settlements, seeks to encourage information sharing and international collaboration among financial regulatory bodies.
Published At
2/26/2024 10:46:59 PM
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