Cryptocurrencies and stablecoins face many legal and international issues. While some coins are not accepted in some countries, issues such as security, competition, and mining waste are the subject of debate. In one such process, FSB President Klaas Knot made a statement on stablecoins this time.
Knot Stable cryptocurrencies will not meet global standards in the future
Stablecoins Will Fail to Meet Global Requirements
According to FSB Chairman Klaas Knot, current stablecoins will not meet the “high-level” recommendations that will soon be issued by global standard setters such as the G20.
“Existing stablecoins will not meet future global requirements,” Klaas Knot, chairman of the international standard setter Financial Stability Board (FSB), said in a letter to G20 finance ministers and central bank governors.
The FSB will finalize its proposals for regulating cryptocurrencies and stablecoins by July, according to its 2023 work plan.
Growing Number Of Concerns
There is no doubt that the number of stablecoins continues to grow. Although the number of real currencies in the world to which stablecoins are pegged is quite small, the growing number of stablecoins continues to be perceived as a disruptive issue in this regard.
In addition, Knot noted that the FSB’s upcoming recommendations will strengthen the governance framework for stablecoins, redemption rights, and stabilization procedures.
How Should DeFi Assets Be Regulated?
The Financial Stability Board (FSB) warned in February 2022 that “the threat to financial stability posed by cryptocurrencies could increase significantly.” With many companies filing for bankruptcy in the past year, regulators around the world, including the FSB, are ramping up efforts to regulate the sector.
The FSB said last week that it will work with other standard-setting bodies to determine how decentralized finance (DeFi) should be regulated. It also plans to work with the International Monetary Fund (IMF) to conduct a study on regulatory concerns about cryptocurrencies.
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