The G20, through its Risk Oversight Board, warned of significant gaps in international efforts to regulate crypto, stressing that these shortcomings could pose a growing risk to global financial stability as markets become increasingly reliant on crypto assets.
The Financial Stability Board (FSB), an affiliate of the G20, stated in a recent review that regulations governing crypto remain inconsistent and uncoordinated across jurisdictions, making them vulnerable to sharp fluctuations and sudden cross-border capital movements.
The FSB noted that regulatory implementation in the sector remains slow, despite the significant rise in the value of cryptocurrencies globally over the past year.
The report indicated that the value of the crypto market has doubled to nearly $4 trillion, and while risks remain limited at present, they are likely to increase as the sector becomes more integrated into the traditional financial system.
Secretary-General of the FSB, John Schindler, emphasized that the cross-border nature of crypto markets makes them difficult to monitor and regulate, emphasizing the need to enhance cooperation among G20 member states to develop a unified and effective framework.
The report also warned of the lack of comprehensive regulations governing stablecoins, which represent a significant part of the crypto market. Their size has risen to approximately $300 billion, a figure that is rapidly increasing as these assets become more widely adopted in markets.
Analysts believe the G20’s stance comes at a sensitive time, especially after the major collapses in crypto markets over the past two years, which caused huge losses and repercussions for investors around the world.
The FSB’s report indicates that countries with advanced regulatory systems remain vulnerable to risks from digital assets originating from abroad, in the absence of full global coordination.
The G20 called for the rapid implementation of new rules and intensified cooperation to ensure the protection of global financial stability.
