Following the recent violent market turmoil in cryptocurrencies, the global stability watchdogs are campaigning for effective regulation of cybercurrencies such as Bitcoin. Cryptocurrencies and markets must be subject to effective regulation and supervision, both at the national and international levels, according to the Financial Stability Board (FSB). Effective and robust rules are required.
Until now, the FSB had not supported the growing demand for clear rules for cyber currencies. “The FSB will report to G20 finance ministers and central bank governors in October on regulatory and supervisory approaches for stablecoins and other cryptoassets,” the stability watchdogs said.
In particular “stablecoins” in focus
The recent turmoil in the crypto asset markets underlined the importance of advancing the work of the FSB and international standards setters. The potential threats to financial stability posed by such cyber currencies need to be addressed, the FSB said. He referred in particular to so-called “stablecoins”. These are cyber currencies aimed at price stability, which should simplify their use as means of payment or store of value. That is why they are often linked to classic currencies such as the US dollar or the euro.
Stablecoins must be governed by strict regulation and oversight by relevant authorities when used as a widespread means of payment or otherwise play an important role in the financial system, the stability watchdogs said. The FSB monitors the risks to the global financial system on behalf of the 20 major industrialized and emerging countries (G20).
Bitcoin & Co. recently crashed dramatically
There have been drastic losses in the crypto market recently. The oldest and best-known cyber currency Bitcoin has lost about 70 percent of its value since it peaked at $69,000 (currently just under $67,900) in November. The barrel of the Cyberdvise Ethereum also stormed into the basement. In May, the stablecoin TerraUSD also registered a huge price drop. Crypto companies such as Celsius Network and Voyager Digital came under a lot of pressure due to the unrest. Voyager Digital has since filed for bankruptcy protection in the United States.
Cryptocurrencies are still largely unregulated in many countries. In early July, the European Union (EU) was the first major economic region to agree on regulations for cryptocurrencies. Representatives of the EU Parliament and EU countries have agreed on a set of rules called “Markets in Crypto Assets” (MiCA), which is likely to come into effect by the end of 2023 at the earliest.
Source: Krone
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
