Push for Modernized Regulatory Frameworks by 2025
The Financial Stability Board (FSB), backed by the G20, has signaled strong support for a major modernization of international financial regulations, aiming for implementation by 2025. This initiative reflects rising concerns about the rapid expansion of the global crypto market and its integration with mainstream financial systems.
Key Areas of Concern Highlighted
- Fragmented Crypto Regulation: The FSB identified “significant gaps” in crypto regulation worldwide, with many countries’ efforts still “fragmented, inconsistent, and insufficient” to address the cross-border nature of crypto-asset markets[1].
- Stablecoin Oversight: Few jurisdictions have comprehensive regulatory frameworks for stablecoins, despite the market nearly doubling to $290 billion in recent years[1]. The FSB warns that this growth and increasing interaction with traditional finance require urgent regulatory attention.
- Financial Stability Risks: Although the FSB currently assesses the risks from crypto to global financial stability as “limited,” these risks are rising alongside the surge in market capitalization, with cryptocurrencies and stablecoins moving fluidly across borders[1].
Recommendations and Global Impact
The FSB’s latest review examined regulatory progress in 29 jurisdictions, including the U.S., EU, Hong Kong, and the UK. The review highlighted:
- The necessity of rapid implementation of consistent rules worldwide.
- The importance of robust cross-border cooperation and coordination, as crypto assets can circumvent national regulations.
- Risks from crypto-related activities by offshore companies, which may still impact local financial systems even with domestic regulation in place[1].
Calls for Unified Global Action
FSB Secretary General John Schindler emphasized that without full international collaboration, effective oversight is nearly impossible: “These things … don’t observe borders.” As the FSB pushes for all jurisdictions to adopt and coordinate stronger frameworks, the global financial sector is bracing for a new era of heightened regulatory standards, aiming to safeguard stability as digital assets continue to evolve.
