WFE Response: FSB Consultative Report on International Regulation of Crypto-Asset Activities

WFE is positive about the possible benefits that cryptography and distributed ledger technology (DLT) might be able to bring to markets. However, we underline that the benefits can “only be sustainable and realised if activity is undertaken safely and accompanied by effective public policy frameworks that mitigate risks and maintain broader trust and integrity in the financial system.” We underline that crypto-asset markets do not present systemic risk to the existing financial system thus far but agree that they need to be subject to effective regulation and welcome IOSCO’s work on this topic. We highlight the problems with the FSB’s definition of crypto-assets, which includes tokenised traditional assets, and re-iterate that traditional assets already have a well-established framework of regulation. Finally, we welcome a mechanism for regulators to co-operate in cross-border supervision of stablecoins and point to IOSCOs principles as a good basis for information sharing arrangements.

Please click here to read the consultation response in full.