Financial Stability Board To Focus on Asset Tokenization and AI, Chair Says
The Financial Stability Board (FSB) will deliver reports on asset tokenization and AI later in 2024, according to Chair Klaas Knot.
FSB Chair @KlaasKnot letter to #G20Brazil Finance Ministers and Central Bank Governors outlines the FSB’s work programme during the Brazilian G20 Presidency.
📃 https://t.co/hipdBI4ouy#FinancialStability #NonBanks #cryptoassets #ClimateChange #CrossBorderPayments pic.twitter.com/qGYxOSpbDT— The FSB (@FinStbBoard) February 26, 2024
In a letter dated February 20 and released February 26, Knot told G20 finance ministers and central bankers that the global financial stability outlook “remains challenging.”
Financial Stability Board Outlines Key Focus Areas for 2024 Regulation
However, the Financial Stability Board has a strategy in place as Knot explained in the letter, which was meant as preparation for the meeting of ministers and bankers scheduled for February 28-29 in São Paulo, Brazil.
Priority areas for the FSB in 2024 will include non-bank financial intermediation, climate change, cross-border payments, as well as asset tokenization and AI, Knot noted in the letter.
Last year, the G20 approved a global regulatory and supervisory framework for crypto assets. The G20 Roadmap on Crypto Assets, endorsed in October, stemmed from the G20 New Delhi Leaders’ Declaration passed in July.
A Synthesis Paper jointly developed by the FSB and the International Monetary Fund introduced the roadmap. The FSB said it would issue a progress report on the roadmap’s implementation in October.
FSB Looks to Standardize Incident Reporting Processes
The Financial Stability Board is also looking to propose a standardized format for incident reporting by facilitating the simultaneous sharing of incident reports among various financial institutions and agencies, Knot said.
“Accelerating digitalisation across all parts of finance has improved efficiencies but also increased the interconnectedness of the global financial system,” the letter said. “This increases the possibility of a cyber or operational incident at one financial institution having spillover effects across borders and sectors.”
Knot also noted in the letter that the Financial Stability Board would seek to address Anti-Money Laundering and Know Your Customer issues as part of its efforts on cross-border payments.
The G20 brings together 19 countries along with the European Union and the African Union. Brazil has taken on the presidency of the G20 for 2024, succeeding India, which was the first G20 leader to underscore the importance of global crypto regulation. South Africa is slated to assume leadership of the G20 in 2025.
The Financial Stability Board is an international organization established in 2009, succeeding the Financial Stability Forum. Comprised of central banks and financial authorities from major economies, it monitors and recommends policies to enhance global financial stability, identify risks, and promote the implementation of measures to safeguard against systemic threats.
