FSB 2024 Agenda: Strengthening Crypto Regulation and Embracing AI”

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The Financial Stability Board (FSB) has published its work program for 2024, highlighting a robust approach to the regulation of cryptoassets and a strong focus on the financial implications of digital innovations such as tokenization and artificial intelligence (AI).

The FSB, the international body responsible for overseeing the global financial system, has drawn up a comprehensive plan for 2024, focusing on the need to streamline the implementation of its global regulatory framework for crypto-asset activities, an initiative that began to take shape in July 2023 d. This framework requires crypto platforms to separate clients’ digital assets from the platforms’ own funds, ensuring a clear separation of interests and strengthening cross-border regulatory cooperation and oversight.

The FSB’s 2024 roadmap includes a dual focus. First, it prioritizes the full implementation of the key attributes of effective financial institution restructuring regimes across all sectors, responding to the lessons learned from the March 2023 banking turmoil. Second, it aims to harness the benefits of digital innovation by e.g. AI and tokenization while diligently mitigating the associated risks.

Another critical area of ​​the FSB’s work is improving cross-border payments. In partnership with the Committee on Payments and Market Infrastructure (CPMI), the FSB has committed to developing an agreed set of actions and a framework to deliver significant progress by 2027. This includes issuing recommendations to promote alignment and interoperability in data frameworks related to cross-border payments and strengthening the regulation and supervision of banks and non-bank organizations providing these services.

In the realm of crypto regulation, the FSB plans to issue progress reports throughout the year, focusing on the interoperability of models that facilitate cross-border payments and the extension of these principles to global regulations for banks and non-bank organizations exploring the crypto sector. FSB’s approach highlights the importance of innovation in crypto markets, tokenization, AI and the development of a global stablecoin.

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On tokenization, the FSB aims to finalize its work on the financial stability implications of tokenizing real-world assets, a trend that is gaining momentum as major banks increasingly implement blockchain technology. The FSB will prepare a report for the G20 on recent developments in AI and their potential implications for financial stability. This report is scheduled for November 2024, while the one on tokenization is expected in October.

A key aspect of the FSB’s program is enhancing cyber resilience. In April 2023, the FSB proposed a standard format called FIRE (Incident Reporting Exchange Format) for financial institutions to report incidents, facilitating the exchange of information between authorities. This initiative aims to promote greater convergence in financial institutions’ reporting of incidents to monetary authorities, thereby improving consistency in cyber incident reporting.

This comprehensive approach by the FSB not only strengthens the global financial infrastructure against emerging digital risks, but also ensures harmonized progress in the era of digital finance, balancing innovation with stability.

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