The Financial Stability Board (FSB), the International Monetary Fund (IMF) and the Bank for International Settlements (BIS) have been tasked with setting standards for a global regulatory framework for cryptocurrencies, according to a Group of 20 (G20) announcement on February 25, 2023. The G20, made up of The world’s 20 largest economies, has recognized the need for a coordinated international effort to address the risks associated with cryptocurrencies and establish clear regulatory guidelines for their use.

The announcement comes in response to the rapid growth of cryptocurrencies and their increasing use in global financial transactions. The FSB, IMF, and BIS will deliver documents and recommendations on the regulation, supervision, and supervision of stablecoins, crypto-asset activities, and markets by July this year. The recommendations are expected to establish clear guidelines for the use of cryptocurrencies and help prevent their misuse for criminal activities, such as money laundering and terrorist financing.

The G20 have also recognized the potential benefits of cryptocurrencies and the underlying blockchain technology. The use of cryptocurrencies could offer advantages such as greater efficiency, faster and cheaper transactions, and greater financial inclusion, particularly for the unbanked population. However, the G20 also recognizes the risks associated with cryptocurrencies, including volatility, market manipulation, and cyber threats.

The regulatory framework is expected to strike a balance between the risks and benefits of cryptocurrencies, ensuring their safe and responsible use. The recommendations are likely to address issues such as licensing requirements, anti-money laundering and financing of terrorism (AML/CFT) measures, consumer protection, and market integrity. The G20 recognizes the need for a coordinated international effort to set these standards and promote global financial stability.

In conclusion, the G20 announcement marks a significant step towards establishing a global regulatory framework for cryptocurrencies. The FSB, IMF and BIS recommendations will provide clear guidelines for the use of cryptocurrencies, ensuring their safe and responsible use while promoting financial stability. As cryptocurrencies continue to gain popularity, it is essential to establish clear regulatory guidelines to prevent their misuse and ensure that their potential benefits are fully realized.