Financial regulators from the U.S. and around the world are urging Congress to take action to pass cryptocurrency regulation. In a new report released on Thursday, the Financial Stability Board (FSB) called on legislators to adopt a “risk-based approach to regulation” for digital assets.
The FSB is an international body that oversees financial stability around the world. The board consists of representatives from 27 countries, including the U.S., U.K., Japan, and China. In its new report, the board cited the growth of the crypto industry as a key reason for the need for regulation.
“The growth of crypto-assets and associated activities has the potential to raise financial stability concerns and increase risks faced by investors and consumers,” the board wrote.
The FSB argued that without proper regulation, the activities surrounding crypto-assets have “the potential to raise significant investor and consumer protection issues, market integrity concerns and money laundering and terrorist financing risks.”
The board went on to call on Congress to create a “risk-based approach to cryptocurrency regulation” that would include “clearly defining crypto-assets and activities associated with them.” The FSB also urged Congress to provide oversight and enforcement for crypto-assets, as well as require firms providing services related to crypto-assets to register.
The FSB’s call is in line with similar requests from other regulators around the world, including the U.S. Securities and Exchange Commission (SEC). The SEC has called on Congress to pass legislation that would provide it with more regulatory powers and authority over the crypto industry. Such a move would go a long way toward both protecting investors and providing clarity to the nascent industry.