These risks were once largely theoretical but they have materialized in recent weeks as the value of major cryptoassets has plunged, high-profile stablecoins have failed and several firms have collapsed.
The FSB said these events highlighted the crypto markets’ “intrinsic volatility, structural vulnerabilities and increasing interconnectedness with the traditional financial system.”
Recent events revealed the risk of contagion both within the crypto sector and between crypto and traditional financial markets, the group noted.
“In addition to imposing potentially large losses on investors and threatening market confidence arising from crystallization of conduct risks, the failure of a market player can also quickly transmit risks to other parts of the cryptoasset ecosystem,” it said.
This may also “have spill-over effects on important parts of traditional finance such as short-term funding markets,” it added.
As a result, the FSB stressed that cryptoassets and markets must face oversight that addresses their increasingly relevant risks.
To that end, the FSB said crypto assets generally, and stablecoins in particular, must adhere to regulations.
“Even as jurisdictions consider potential changes to their frameworks, so-called stablecoins and other cryptoassets do not operate in a regulation-free space and must adhere to relevant existing requirements where regulations apply to address the risks these assets pose,” it said.
Given that cryptoassets may be performing the same basic economic function as traditional financial assets, “they are subject to relevant regulations applicable to the underlying economic and financial nature of cryptoassets,” the FSB argued.
Additionally, the global policy group said crypto firms must ensure they’re meeting all of their existing legal obligations — including both crypto-specific rules and overarching legal requirements.
The FSB reiterated its commitment to promoting consistency and cooperation among regulators and policymakers around the world to develop risk-based, technology-neutral rules for the crypto sector based on the principle of “same activity, same risk, same regulation.”
The FSB said it will report to the G20 finance ministers and central bank governors on crypto regulation in October, including high-level recommendations for regulating stablecoins.
It’s also planning a public consultation on proposed recommendations for promoting international consistency in the oversight of cryptoassets and markets.
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.
The S&P/TSX composite index was up 0.05 of a point at 24,224.95.
In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.
The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.
The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.
The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.
This report by The Canadian Press was first published Oct. 10, 2024.
