Financial Stability Board Warns G20 to Focus on Risks of Cryptocurrencies and Stablecoins

According to market reports, the Financial Stability Board (FSB) has submitted a midterm report to the G20, currently chaired by South Africa. FSB Chair Andrew Bailey highlighted cross-border payments, cryptocurrencies and stablecoins, implementation monitoring, and artificial intelligence in a brief letter to G20 finance ministers and central bank governors, with cross-border payments and cryptocurrencies taking precedence. Last week, the FSB noted that while much work has been done in the cross-border payments area, the 2027 target remains challenging to achieve, with limited progress. In the cryptocurrency sector, the letter and accompanying report emphasized the industry's growth and its increasing integration with the traditional financial system. Therefore, any disruption in the cryptocurrency sector could potentially impact financial stability. Despite many jurisdictions planning (93%) or having already established (88%) regulatory frameworks for cryptocurrencies and stablecoins, these frameworks often focus on anti-money laundering and sanctions compliance rather than issues aimed at protecting financial stability.

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