Since the major cryptocurrency exchange FTX collapsed, attention on bitcoin and other cryptocurrencies has increased to unprecedented levels.
With the amount of money thought to have been lost by FTX and its sister company Alameda Research reaching eye-popping amounts and threatening to swallow the larger crypto market, calls for stronger regulatory oversight have become increasingly loud over the last week.
Following the most recent meeting of the Group of 20 (G20) industrialized nations in Indonesia, the leaders of the participating nations described the need for international regulations to control the rapidly expanding bitcoin and cryptocurrency space as “critical” and emphasized the need to reduce any risks to “financial stability.”
The G20 leaders, including American president Joe Biden, said in a statement that was posted to the White House website after their meeting this week in Bali, Indonesia, that “it is critical to build public awareness of risks, to strengthen regulatory outcomes, and to support a level playing field while harnessing the benefits of innovation.”
The Financial Stability Board (FSB), a global organization that sets financial standards, put out regulations last month that would subject cryptocurrency businesses and markets to the same stringent regulations that apply to traditional finance.
The G20 leaders stated that they “welcome the FSB’s proposed approach for establishing a comprehensive international framework for the regulation of crypto-asset activities based on the principle of “same activity, same risk, same regulation,” adding that they want to “ensure that the ecosystem of crypto-assets, including so-called [traditional currency-pegged] stablecoins, is closely monitored and subject to robust regulation, supervision, and oversight to mitigate potential risks to the global financial system.