In its new regulatory framework, the Financial Stability Board wants to treat companies that offer cryptocurrency services the same way it treats banks.
The FSB, the world’s most prominent financial watchdog, plans to put out rules for crypto in 2023.
The Financial Times says that in the coming months, the FSB will give a timeline to regulators worldwide. It will let them put its first recommendations on how to regulate crypto around the world into action, it said.
After a year of high-profile company failures, this is part of a stepped-up effort to regulate and limit crypto activities. But most policy needs tos to need to realize that crypto isn’t to blame. Instead, the people who run these centralized lending companies are to blame.
Regulating Crypto as Banks
Dietrich Domanski, Secretary General of the FSB, told the FT that the regulator was trying to find a clear path forward for the crypto industry. Fears that they were going to destroy the new financial sector were put to rest when he said:
“Many crypto market participants argue that authorities are hostile to innovation. I would say so far; authorities have been fairly accommodating . . . recent events have reinforced the recognition that it is indeed urgent to address risks.”
But he also said that the goal would be to regulate crypto service providers the same way banks are regulated, “if they provide the same service as banks.”
Domanski said that if there were such rules, the Terra and FTX disasters would not have happened because neither of them would have met “the criteria for sound governance.”
In other words, the FSB wants to ban all crypto companies that don’t meet the requirements for a banking license, which is pretty much all.
After the financial crisis of 2008, which banks caused, the FSB made a global policy that forced banks to raise billions of dollars and put stricter risk management frameworks in place.
End of Freedom from Money
Over time, banks have made it harder for people to be financially free by asking for more and more personal and financial information from their customers.
Few terrorists and people who launder money have made life hard for the other 99% of people. Everyday banking is minimal because it requires a lot of paperwork and Knows Your Customer (KYC) checks to open an account, as well as high fees, slow transactions, limits on how money can be moved, and proof of funding or source of capital.
Banks punish their customers because they think they are up to no good until they can prove otherwise. It is why crypto was made, but it looks like the people in charge want to turn it into regular finance with all the problems that come with it.
