G20’s international watchdog, the Switzerland-based Financial Stability Board (FSB), said in its latest report that regulators need to improve their risk assessment strategies regarding financial activity in the crypto space, according to a report by Reuters on May 31.
The report noted that one potential risk assessment metric regulators could look at is banks’ and other financial entities’ degree of exposure to cryptocurrency. The report also added that the FSB does not currently believe that crypto poses “a material stability risk” to the financial sector.
As per the report, existing crypto regulations are somewhat weak, and the fast rate of technological innovation may leave the sector with even more areas of questionable regulation. Crypto assets currently can reportedly fall outside regulators’ jurisdiction, due in part to inconsistent standards between countries.
China, for instance, has reportedly taken a “near-total ban” approach to cryptocurrency exchanges, while Japan is attempting to keep cryptocurrency exchanges legal with proper licensure.
As previously reported on Cointelegraph, Japan is currently cracking down on cryptocurrency exchanges that do not have sufficiently good anti-money laundering practices. Unlike China and South Korea, initial coin offerings in Japan remain legal. Japan will also be hosting the upcoming G20 summit in Osaka this June, and is expected to lead the conversation on international crypto regulations.