The framework is based on the principle of ‘same activity, same risk, same regulation’ and provides a basis for ensuring that cryptoasset activities and stablecoins are subject to "consistent and comprehensive regulation, commensurate to the risks they pose, while supporting responsible innovations potentially brought by the technological change."

The framework consists of two distinct sets of recommendations:

1. high-level recommendations for the regulation, supervision and oversight of cryptoasset activities and markets;

2. revised high-level recommendations for the regulation, supervision, and oversight of 'global stablecoin' arrangements.

The recommendations focus on "addressing risks to financial stability, and do not comprehensively cover all specific risk categories related to cryptoasset activities. They take account of lessons from events of the past year in cryptoasset markets, as well as feedback received during the public consultation of the FSB’s proposals."

The document describes how the two distinct sets of recommendations build a framework for the regulation, supervision and oversight of global stablecoins arrangements and other cryptoasset activities and sets out next steps.

The key components of the framework were "proposals for recommendations that promote the consistency and comprehensiveness of regulatory, supervisory and oversight approaches to cryptoasset activities and markets; and revised high-level recommendations for the regulation, supervision, and oversight of “global stablecoin” arrangements to address associated financial stability risks more effectively."

The document summarises the comments from respondents to the consultation and sets out the main changes made to the final recommendations in order to address them.

The letter introduces the reports the FSB is delivering to the February G20 FMCBG meeting, which cover:

• The financial stability aspects of commodity markets, which forms part of the FSB’s work programme to strengthen the resilience of the NBFI sector.

• The financial stability risks of decentralised finance (DeFi), a growing segment of the cryptoasset ecosystem. The report forms part of the FSB’s work programme, jointly with sectoral standard setters, for the delivery of a consistent and comprehensive regulatory framework for cryptoassets.

• Priority actions for achieving the G20 targets for enhancing cross-border payments. The report contains a detailed set of next steps to achieve the G20 cross-border payments roadmap’s goals and is being accompanied by the establishment of two new taskforces to work in partnership with the private sector.

This report:

• describes the DeFi ecosystem, its key elements and players, as well as the main products;
• discusses financial vulnerabilities of DeFi, including those stemming from its specific features;
• sketches possible scenarios for DeFi and the implications for financial stability; and
• sets out additional work to analyse, monitor and address vulnerabilities in the DeFi ecosystem.

The group met to discuss global and regional economic and financial market developments, including recent work to address vulnerabilities in non-bank financial intermediation and to promote consistent and effective regulation of cryptoassets and markets as well as stablecoin arrangements. 

The core components of this framework are proposals for:  

• recommendations that promote the consistency and comprehensiveness of regulatory, supervisory and oversight approaches to cryptoasset activities and markets and strengthen international cooperation, coordination and information sharing; and
• revised high-level recommendations for the regulation, supervision, and oversight of “global stablecoin” arrangements to address associated financial stability risks more effectively.

The two sets of recommendations are closely interrelated, reflecting the interlinkages between stablecoins and the broader cryptoasset ecosystem. They have been developed as stand-alone documents but are intended to work together in light of these interlinkages and to be consistent where they cover the same issues and risks

The FSB is seeking comments from the public on the proposed recommendations. The framework note includes a set of questions for this purpose. Responses should be sent to fsb@fsb.org by 15 December 2022.

The FSB will continue work on the financial stability and regulatory and supervisory implications of technological innovation, with a particular focus on various forms of cryptoassets, including decentralised finance (DeFi).