This week, the FSB (Financial Stability Board) published its final set of recommendations for regulating cryptoassets and related services. The recommendations follow on from the FSB’s previous public consultation.
The guidelines are designed to provide a common base for international regulatory coverage of an otherwise borderless technology and product in respect of which regulatory development has been inconsistent and open to arbitrage. The FSB has therefore provided a series of high-level recommendations which domestic regulators can use as a basic framework for developing their own regulatory regimes.
The recommendations, although voluntary, create a useful benchmark to add much needed regulatory consistency. The recommendations cover two key areas:
We have set out a short overview of the recommendations (some of which are paraphrased) in the tables below.
The recommendations are likely to influence the UK’s upcoming proposals for the regulation of cryptoassets, which are expected to be detailed soon following the government’s February 2023 consultation and the recent passage of the Financial Services and Markets Act 2023 (see our overview of the FSMA 2023 here). Over in Europe, given the wide remit of the recommendations, the guidelines could also impact the future development of certain areas not currently covered by the EU’s regulatory framework under MiCA – such as NFTs and decentralised finance.
The FSB’s shared workplan shows that it expects to remain busy in this area. The FSB will deliver to the G20 a joint report with the International Monetary Fund (IMF) later this year, covering their work on the monetary issues with cryptoassets. This follows on from the IMF’s previous note to the G20 on this topic.
(1) Recommendations on crypto-asset activities and markets: