FSB Warns of Systemic Risks from Fragmented Crypto Regulations
The Financial Stability Board's global review exposes regulatory fault lines in crypto oversight. Nearly 40 jurisdictions show dangerous disparities in digital asset rules, creating openings for arbitrage that could trigger cascading market failures. Cross-border coordination remains alarmingly inadequate as firms exploit jurisdictional differences.
European watchdogs confirm widespread 'forum shopping' among crypto businesses, with entities strategically choosing EU member states based on regulatory leniency. Legal barriers and conflicting asset definitions continue to hinder information sharing between authorities.
This regulatory patchwork threatens the $4 trillion crypto ecosystem's stability just as institutional adoption accelerates. The FSB's warning comes amid growing consensus that current frameworks cannot contain risks from borderless, fast-evolving digital asset markets.
