Today the Financial Stability Board (FSB) released updated versions of its G20 high level recommendations for regulating crypto-assets and global stablecoins. It updated three areas of its proposals, including for crypto custody, conflicts of interest and cross border regulator cooperation. The international body continues to be concerned about the interconnectedness between traditional finance (TradFi) and the crypto sector.
Regarding interlinking with TradFi, it pointed to the shuttering of Silvergate bank as a result of mass withdrawals by crypto firms without mentioning names. In the case of Signature it said crypto “may have contributed to the failure.” It also mentioned the temporary de-pegging of a stablecoin following a regional bank failure, a reference to USDC reserves held at Silicon Valley Bank.
Following these and ongoing revelations regarding the collapse of FTX, the updated recommendations tighten three areas.
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