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FSB Chair Calls for Regulation of Unbacked Crypto to Protect Financial Space

Knot warns that further development of the cryptocurrency sector could undermine financial stability in the world. FSB chair explains that the fast pace at which digital assets are evolving right now could pose a threat to the global monetary community. Besides, crypto tokens are often used in illegal activities. For these reasons, the Board is currently working on policies to regulate the crypto space. Follow GBC Time for more news about the cryptocurrency market.

In the report, the FSB head underlines several concerns the Board has regarding crypto assets:

  1. Digital currencies are not regulated by any authority, which makes it have to supervise and monitor crypto activities;
  2. The connections between the traditional financial market and the crypto sector are becoming more regular than ever. This negative impact officially regulated markets;
  3. Crypto markets lack investor and consumer protection;
  4. Criminals use crypto assets for money laundering, cyberattacks, ransomware, and other illicit activity.

The fast development of the cryptocurrency sphere and its interconnection with other financial sectors could lead to gaps, fragmentation, and arbitrage of the regulatory framework says Knot. The Russia-Ukraine war only highlighted these threats.

That is why the FSB chair believes that unbacked digital assets (BTC and altcoins) and stable coins should be monitored by a regulatory body. The board is now focused on creating a rulebook for the crypto sector. The organization states it can take a leading role in developing future cryptocurrency guidelines thanks to its international connections and memberships.

FSB also collaborates with the government bodies like Financial Action Task Force to regulate the decentralized finance (Defi) market.

As GBC Time reported earlier, the European Union aims to launch the cryptocurrency legislation later in 2022.

Read more: How to invest in cryptocurrencies and turn a profit?

Read more: Where to buy Cardano coin?

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