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