The head of the Financial Stability Board warned of the risks posed by multifunction crypto intermediaries and stablecoins.

Remarks: FSB Chair Klaas Knot said:

  • MCIs have shown that crypto may not be as decentralized as some claim it to be, lack proper governance, and may amplify financial vulnerabilities.

  • Revived interest in the stablecoin market—some of which has come from large tech firms and traditional financial institutions—poses potentially significant systemic implications.

Background: The FSB earlier this week released its key initiatives for the coming year, which includes encouraging the implementation of crypto standards. In a recent speech to the FSB, Acting Comptroller of the Currency Michael Hsu said crypto industry resistance has held up progress on consolidated supervision of virtual assets.

ICBA View: ICBA supports global efforts to advance international cryptoasset regulation, including the FSB’s framework to support consistent regulatory and supervisory standards and baseline policy recommendations from the International Organization of Securities Commissions.