FSB to implement universal incident reporting standards for crypto-affiliated institutions

The global financial stability outlook remains challenging, according to Klaas Knot, the chairperson of the Financial Stability Board (FSB). In a letter addressed to G20 finance ministers and central bankers, Knot outlined the FSB’s plan, which includes focusing on asset tokenization. The letter, dated February 20 and released on February 26, highlighted priority areas such as non-bank financial intermediation, climate change, cross-border payments, and digital innovation. Knot mentioned that the FSB intends to deliver reports on the financial stability implications of asset tokenization and artificial intelligence by 2024. The G20 endorsed a global regulatory and supervisory framework for crypto-assets last year, based on the G20 Roadmap on Crypto Assets proposed in July. The FSB and International Monetary Fund collaborated on a Synthesis Paper that outlined the roadmap. The FSB plans to release a progress report on the implementation of the roadmap in October and propose a format for incident reporting exchange. This will enable the sharing of information on incidents across multiple financial institutions and agencies simultaneously. Additionally, the FSB will address Anti-Money Laundering and Know Your Customer protocols in relation to cross-border payments. The G20 consists of 19 countries, the European Union, and the African Union. Brazil has assumed the presidency of the G20 for this year, succeeding India, which was the first G20 leader to emphasize the need for global crypto regulation. South Africa will take over the G20 leadership in 2025. The FSB, an independent association, is hosted by the Bank for International Settlements and aims to promote international cooperation and information exchange among financial regulators.