Global Correspondence
GFMA Submits Comments on FSB Thematic Peer Review on Global Regulatory Framework for Crypto-asset Activities
GFMA submitted a letter to the Financial Stability Board (“FSB”) in connection with the FSB’s “Thematic Peer Review on FSB Global Regulatory Framework for Crypto-asset Activities.”
The letter sets out key considerations relating to the development of international standards in the regulation of digital-assets. Key messages include that:
- Cross-border consistency, supported by frameworks that emphasize “same activity, same risk, same regulatory outcome,” is critical to curbing fragmentation, reducing friction, lowering compliance costs, and preserving a level playing field.
- Regulators should look to existing financial regulations wherever possible and apply them in a technology-neutral manner. Overly prescriptive or uncoordinated rules may inadvertently encourage regulatory arbitrage.
- Clear, globally-consistent taxonomies for digital-assets are critical, and a lack of consensus on definitions and classifications of digital-assets contributes to unnecessary legal uncertainty. Agreeing core definitional standards would facilitate effective regulation and market stability.
- Encouraging the entrance of large, established financial institutions into the digital-asset space can enhance market governance and risk management. Further to this, regulations applicable to these institutions should not impose duplicative or overly restrictive obligations simply because new technology is involved.
- Authorities should keep a close watch on other emerging areas such as DeFi, algorithmic stablecoins, and cross-platform exposures, where rapid technological advancement outpaces current regulatory practices. Proactive data-sharing and supervisory coordination can help mitigate emerging threats.
– 28 March 2025 –
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