The Bank Policy Institute and TCH in support of blueprint for digital-asset oversight
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The Bank Policy Institute and TCH in support of blueprint for digital-asset oversight 19 December 2022Europe Reporter: Lyndsey Young
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The Bank Policy Institute (BPI) and The Clearing House (TCH) have commented on two Financial Stability Board (FSB) consultative reports outlining approaches for the oversight and regulation of digital assets and global stablecoin arrangements.
In an open letter, the TCH and BPI said they support the FSB’s 19 recommendations in the consultative reports and its efforts to balance responsible innovation with “comprehensive, clear and consistent rules”.
The BPI and TCH agreed that the frameworks could be further strengthened by explicitly clarifying that the risks in the digital asset ecosystem primarily relate to activities of nonbanks and calling on local authorities to define permissible activities for regulated banks.
They also recommended establishing universal definitions distinguishing among types of digital assets and the risks each may present.
The letter says: “BPI and TCH support innovation but believe it must be conducted in a manner consistent with the safety and soundness of the financial system, anti-money-laundering and countering-the-financing-of-terrorism standards, and robust consumer and investor protections.”
Like the FSB, BPI and TCH firmly believe that the same activities posing the same risks should be subject to the same regulation.
The letter notes: "[The] comprehensive regulatory risk management framework distinguishes banking organisations from nonbanks, protects clients (including consumers), and promotes safety and soundness regardless of the activities in which banking organisations are engaged."
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