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The ongoing turmoil in the cryptocurrency world has given the Financial Stability Board (FSB) new reason to develop regulations for the industry.
That’s according to Steven Maijoor, head of the FSB’s working group on crypto assets and the latest person in the industry orbit to call for more regulation.
He made his remarks Thursday (November 17, 2022) at the Institutional Digital Assets and Crypto Regulation Symposium organized by City & Financial Global in London, Coindesk reported.
Based in Switzerland, the FSB works with national financial authorities and international standards bodies “as they work toward developing strong regulatory, supervisory and other financial sector policies,” per the organization’s website.
According to Maijoor, the rapid growth of the crypto market, coupled with structural vulnerabilities and a lack of regulations means they will “soon reach a point where they represent a threat to the stability of the global financial system.”
Acting Comptroller of the Currency Michael J. Hsu said consumers should take the same cautious approach to cryptocurrencies that banks have taken.
He said his agency’s “careful and cautious” strategy for crypto activities by banks had mitigated the risk of contagion from this year’s events in the crypto world.
“Years of reform and rebuilding after the 2008 financial crisis have strengthened the banking system, making it more resilient, more fair and more trustworthy,” Hsu said during a public meeting of the U.S. Department of Treasury’s Financial Literacy and Education Commission (FLEC). “While continued improvements need to be made, this has proven valuable with the rapid rise and fall of crypto this past year.”
Hsu and Maijoor are among many people preaching the gospel of regulated crypto in the wake of FTX’s implosion. As PYMNTS reported Thursday, this extends to proponents of the digital tokens in Brazil, who are calling on lawmakers there to approve crypto regulations.
Brazil’s cryptocurrency sector wants the country to approve legislation providing oversight to their industry, part of a wave of calls for more regulation in the wake of the FTX collapse.
Roberto Dagnoni, an executive at Mercado Bitcoin, told Reuters the law had been “kind of dormant” amid the country’s recent election but has gained new urgency.
If there’s an upside to the FTX situation, he said it’s that it could make the law a priority.
“The rules that currently exist have not been applicable to some players, so they can do whatever you want … This (law) would change a lot,” Dagnoni said.
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