The Financial Stability Board (FSB) has finalized a global regulatory framework for crypto-asset activities, with the aim of promoting comprehensive and internationally consistent regulatory and supervisory approaches. The announcement was made on July 17, 2023 and the framework is based on the principle of ‘same activity, same risk, same regulation’.

The FSB framework incorporates information from last year’s events in the crypto asset markets and feedback received during the FSB public consultation. It provides a strong foundation to ensure that crypto-asset and so-called stablecoin activities are subject to consistent and comprehensive regulation, commensurate with the risks they pose.

The framework consists of two distinct sets of recommendations. The first set includes high-level recommendations for the regulation, supervision, and surveillance of crypto-asset markets and activities. The second set comprises revised high-level recommendations for the regulation, supervision, and oversight of “global stablecoin” arrangements.

The final recommendations are based on the implementation experiences of the jurisdictions and build on the principles that informed the consultative framework. These principles include ‘same activity, same risk, same regulation’; high level and flexible; and technology neutral.

The FSB has strengthened both sets of high-level recommendations in three areas: ensuring adequate protection of client assets, addressing risks associated with conflicts of interest, and strengthening cross-border cooperation.

The FSB and standard setting bodies will continue to coordinate to promote globally consistent regulation by considering the need for further guidance or standards and monitoring the status of implementation at the jurisdictional level.

The recommendations focus on addressing risks to financial stability and do not comprehensively cover all specific risk categories related to crypto asset activities. Central Bank Digital Currencies (CBDCs), referred to as digitized central bank liabilities, are not subject to these recommendations.

The FSB has been working closely with industry standard setting bodies (SSBs) and international organizations to ensure a coordinated, mutually supportive and complementary approach to monitoring and regulating crypto asset markets and activities.

This global framework includes a shared work plan that the FSB and SSBs have developed for 2023 and beyond.

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