Will a regulatory framework for cryptocurrencies arrive in 2023? By the end of the year, we might be able to have global crypto regulation that will allow cryptocurrencies to be brought under control.
This will seem like pure utopia to some skeptics, but it seems that after the G20 meeting on February 25, there have been synergies between 3 major institutions in financial matters. I am talking about the FSB, IMF and BIS.
Some may not know what this is all about, but it will not take very long to get up to speed on the issue.
This is an opportunity for everyone, something that will make it possible to avoid sanctions, lawsuits, or other troubles that have been faced by investors and corporations in recent years.
FSB and crypto regulation, what is it all about
Some will remember the Financial Stability Forum until 2009, but since that year the name has changed.
Today, countries around the world are increasingly connected to take advantage of any benefits and opportunities from mutual collaborations.
This is why the Financial Stability Board (FSB) is important. This international organization brings together all G20 countries and aims to regulate the global financial turmoil that could upset the subtle balances achieved today.
The representatives at the FSB table are the central banks of each member state, and cryptocurrencies have been recognized as one of the reasons to collaborate effectively once again.
IMF, what is it?
International cooperation today is necessary in order to safeguard all the states of the world by favoring national currencies on par with world trade.
The International Monetary Fund (IMF) is a public international organization that came into being with the Bretton Woods agreements in 1945, after the end of World War II.
There were 44 member states at the time. But today, there are as many as 190 member governments in the IMF.
The purpose of the International Monetary Fund is to ease barriers between countries and deal with members’ financial crises. As well as protect struggling economies.
Today it is based in Washington and we know that it will work with the FSB and another body to create a general framework that can regulate the cryptocurrency world. But what is the other organization involved?
BIS: regulation is mandatory
When people talk about finance, they immediately think of Wall Street. It may be Hollywood, or simply the cinema that has plagiarized the minds of all those who associate the famous financial district with the world’s oldest financial hub. But that is not the case.
The Bank for International Settlements (BIS) has its headquarters in Basel, Switzerland, and is the world’s oldest financial institution.
Created as a global institution in 1930, it operates as a joint stock company (also having a board of directors). In which, however, shares can only be held by central banks or similar entities, not by private individuals.
Today, more than 60 central banks own shares in the BIS and sit at the meeting table. With the purpose of regulating relations among the central banks themselves and promoting cooperation.
In order to end the chaos dictated by the cryptocurrency world, BIS, IMF and FSB have come together to have their say.
IMF-FSB Synthetis Paper, what it is
When the world’s greatest powers come together to initiate a meeting like the G20 we can be sure that something great will always come out.
That is why it seems that after Feb. 25, these 3 international bodies decided to collaborate. Thus, in order to identify guidelines capable of laying the groundwork for global regulation on cryptocurrencies.
CSF, IMF and BIS will collaborate to produce the “IMF-FSB Synthetis Paper”. This is a document that will lay the groundwork for a coordinated and effective policy approach towards cryptocurrencies.
The paper will probably be ready before late summer 2023. And, will with all probability have a major impact on the Web3. At least trying to protect companies and users involved in the industry.
Possible regulation on a global scale, or the simple opportunity for an analysis of the risk and economic outlook regarding these digital assets, by these large institutions, could really make a difference.
Is a global crypto regulation possible?
Today, however, we wonder if such a thing is really feasible.
Many states, from Switzerland to Italy, from the United States to Australia, have been trying for some time to introduce ad hoc regulations for cryptocurrencies. But the system is not yet meeting the needs of governments and citizens as well as it could.
The idea of a global regulatory framework by the IMF, FSB and BIS seems optimistic. But perhaps even just traveling on the guidelines will allow all states to implement an effective policy toward crypto assets.
All that remains is to wait until July and September. Thus when the organizations will have provided a generic regulation for cryptocurrencies after working together.
Read also: Cryptocurrency regulation: 10 countries where digital assets are banned