The Global Financial Stability Board (FSB) published a report titled “The Financial Stability Implications of Multifunction Crypto-asset Intermediaries” urging for more measures required to stop collapses like FTX ahead. The report stands crucial as the FSB is a group that consists of regulators, central banks, and treasury officials from the G20 economies. Regulatory gaps in MCI operations 
As per the report, Multifunction Crypto-Asset Intermediaries (MCIs) are under scrutiny as global regulatory bodies, including the Financial Stability Board (FSB), express concerns over their impact on financial stability. MCIs are entities or groups combining a range of crypto-asset services, products, and functions, playing a pivotal role in the evolving crypto ecosystem.
The watchdog mentioned that MCIs include <a href="https://news.todayq.com/binance-richard-teng-makes-new-pledges/" target="_blank" rel="noopener noreferrer nofollow">Binance</a>, Bitfinex, and Coinbase (and FTX prior to its failure). These firms hold a significant share of cumulative crypto assets trading volume. As of now, the total market cap of the crypto market stands around $1.4 trillion.
The report mentioned that several MCIs engage in proprietary trading, investment functions, and the issuance, promotion, and distribution of crypto-assets, including stablecoins. The FSB notes that MCIs often operate outside existing regulations which leads to a major information gap. However, the expansion of MCI business models and services has occurred amid non-compliance or the absence of adequate regulations. This includes market making, trading, asset management, and blockchain infrastructure,&nbsp; Ongoing evaluation needed for crypto orgs 
The FSB’s report highlighted the critical role MCIs play in the crypto-asset ecosystem. Meanwhile, there are challenges in assessing their vulnerabilities and transmission channels due to data limitations. This might help MCIs to amplify inherent vulnerabilities in crypto markets and pose risks to financial stability. This depends on their linkages with the traditional financial system and whether these linkages are concentrated within systemically important financial institutions.
It is important to note that there are pieces of evidence that suggest a limited threat to global financial stability and the real economy from MCI failures. Still, the FSB points out the need for ongoing assessment. Recent closures of “crypto-asset-friendly” banks with concentrated deposit exposures to crypto-reliant firms highlight potential risks.&nbsp;
Stress events in crypto-asset markets have caused losses and shaken confidence in the market. This implicates the importance of effective implementation and enforcement of globally consistent crypto-asset regulations, it added.
Through this report, FSB urges regulators to address information gaps, enhance cross-border cooperation, and evaluate the evolving role of MCIs.
© Todayq News

Global Regulators on alert, seeks more Crypto safeguards

Todayq News

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