G20’s global watchdog, the Financial Stability Board, does not consider cryptocurrencies a risk to financial stability. In one letter to the Group of 20 central bankers and finance ministers, its Cahir Mark Carney, said that FSB was pivoting away from designing some new policies, banking regulations, as well as focusing on reviewing existing rules. His comments also suggest that there is not G20 Watchdog consensus on common crypto regulations, despite calls from member-states for global adoption guidelines.
No consensus for global crypto regulations
The FSB or Financial Stability Board, the body which coordinates financial regulation for the G20 Watchdog, countries, has effectively dismissed calls from the member-states to adopt global cryptocurrency rules. Reuters reported that the Chair of FSB, named Mark Carney, in one letter to the central bankers, as well as finance ministers, said:
The initial assessment of FSB is that crypto-assets do not pose risks to global financial stability at this time.
Some representatives from G20 countries meet on the 19th of March in Argentina. Statements in several member-states suggested that the crypto regulations would be on the agenda of the summit.
In February, the high-ranking French, as well as German officials issued a letter, urging their colleagues to discuss the implications of cryptocurrencies such as Bitcoin, within the G20 format. According to some reports from recently from Tokyo, the Japanese representatives intended to push for global legislation on cryptocurrencies.
However, the comments of Carney suggest that there is not enough consensus for a common approach to cryptocurrency regulation. The FSB insists on more international coordination in monitoring the rapidly evolving crypto sector. Carney said:
As its work to fix the fault lines which caused the financial crisis draws to a close, the FSB is increasingly pivoting away from the design of some new policy initiatives towards dynamic implementation, as well as rigorous evaluation of the effects of the agreed G20 reforms.
Mark Carney, who is also the serving governor of the Bank of England, recently called for greater regulation of cryptocurrencies. In one speech earlier this month, he stated:
The time has come to hold the crypto-asset ecosystem to the same standards as the rest of the financial system.
He also described the volatility which is connected with the crypto markets as “speculative mania.” Coming on the possibility of adopting global crypto rules, he also admitted that the regulation is probably going to be on a country-by-country basis. The central banker said:
I would have a greater expectation for a series of national steps rather than some big coordinated approach.
He also voiced support for the idea in order to regulate some elements of the crypto-asset ecosystem to protect the security and soundness of the financial system.
Next year, Carney is going to stand down as FSB’s Chair, when his term as Governor of the Bank of England will end. The G20 summit took place on 19th-20th of March in the Argentine capital Buenos Aires.