The research emphasizes stablecoins and exhorts decision-makers to make sure that stablecoin issuers fully support all of their assets in order to avoid another collapse like Terra’s in May. The FSB will compile and consider the proposals when the public consultation concludes on December 15.

The recent market turbulence has made it essential for regulators to step up and take charge of market regulation. In a letter to the G20, the head of the FSB, Klaas Knot, stated that “the current crypto winter has reinforced our view of underlying structural risks in these markets.”

The valiant endeavor at harmonized regulation by the European Union

With a varying degree of effectiveness, the European Union (EU) has taken an united approach to regulation. The Markets in Crypto-Assets (MiCA) law, recently approved by the EU, aims to synchronize the use of virtual currencies and distributed ledger technology (DLT) throughout the 27 Union members.

In an effort to present a unified front in the fight to reduce the risks associated with virtual assets in the financial industry, the European Securities and Markets Authority (ESMA) in addition to the MiCA published a report on the DLT pilot regime.

Since authorities regulate the industry in accordance with their own nations’ unique demands, there is hardly no regional strategy for the industry’s regulation globally. As an illustration, consider the uneven nature of virtual currency taxation around the world. While India imposes taxes as high as 30% on income from trading digital currencies, Portugal has no such taxes.