G20 Watchdog Releases Framework for 'Vigilant' Crypto Monitoring

The global Financial Stability Board has published its expected framework for monitoring risk in the cryptocurrency markets.

Jul 16, 2018 at 10:50 a.m. UTC
Updated Sep 13, 2021 at 8:10 a.m. UTC

The Financial Stability Board (FSB), an organization focused on analyzing and making recommendations to the G20 on global financial systems, has presented a framework for monitoring cryptocurrency assets.

It notably lists several metrics that the FSB will use to keep an eye on the developing crypto markets and "should help to identify and mitigate risks to consumer and investor protection, market integrity, and potentially to financial stability."

The standardized framework was published along with a report on Monday and has been submitted to the G20 nations' financial ministers and central bank governors.

According to the document, the FSB's monitoring efforts will focus on crypto assets' price volatility, the size and growth of initial coin offerings (ICOs), crypto's wider use in payments and institutional exposure, as well as the market's volatility when compared to gold, currencies and equities.

The FSB – which is led by Bank of England governor Mark Carney – will also periodically compile qualitative reports to gather intelligence for market confidence, the report says.

The organization further sets out the reasoning behind the framework, saying:

"While the FSB believes that crypto-assets do not pose a material risk to global financial stability at this time it recognizes the need for vigilant monitoring in light of the speed of market developments."

The report indicated that, apart from the FSB, other international regulatory organizations too are stepping up their efforts in monitoring specific areas of the cryptocurrency industry.

For instance, International Organization of Securities Commissions, a global regulatory body made of securities watchdogs, is developing its own framework in an effort to help member countries better analyze the impacts of domestic and foreign ICOs on investors.

Meanwhile, the Basel Committee on Banking Supervision (BCBS) is gathering data on its member banks' direct and indirect exposure to cryptocurrency in an effort to quantify the potential impact of the technology.

The FSB report comes as the result of the G20 meeting in March this year, at which there were calls for global regulation of cryptocurrencies. As previously reported by CoinDesk, member countries agreed at the time that initial recommendations were required over what data should be used to monitor the crypto space, and set July as a deadline.

Mark Carney image courtesy to the FSB

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