Regulation Accelerates As Crypto Market Crashes
As the crypto market plunged in value in recent months accentuated by high-profile financial meltdowns, the Financial Stability Board (FSB) early this month announced that it is working on a practical regulatory framework, to ensure that “crypto-assets are subject to robust regulation and supervision.” Accordingly, the regulatory body will report to the G20 finance ministers and central bank governors in October, this year.
The Monetary Authority of Singapore (MAS) followed suit with the recent announcement from Ravi Menon, that MAS is targeting to consult on crypto regulations involving consumer protection around September or October this year.
Currently, most major regulators today do not cover areas for crypto such as consumer protection, market conduct, and reserve backing for stablecoins, and the focus has been mostly on money laundering and terrorism financing risks.
With the recent crypto market turmoil, its intrinsic volatility, and structural vulnerabilities, it comes as no surprise that there is an impetus to push for greater crypto regulation, especially for the retail market.
In the recent interview of Scott Kominers, Professor of the Harvard Business School by Christina Pazzanese of the Harvard Gazzette, he said that “there’s a need for more consumer protection in this space across the board. There needs to be more transparency and not just transparency at the abstract level, but the technology needs to be made transparent for consumers in ways that they can understand,”.
“One of the big challenges we’ve faced in regulating crypto to this point, and we’ll face going forward, is balancing the need to achieve platform stability with the need to maintain platform competition and interoperability,” he continued.
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