## imf-fsb-g20-crypto-asset-policy-implementation-roadmap — Executive summary ## Source details **Canonical URL:** [imf-fsb-g20-crypto-asset-policy-implementation-roadmap — Executive summary](https://www.imf.org/-/media/files/research/imf-and-g20/2024/imf-fsb-g20-crypto-asset-policy-implementation-roadmap.pdf) ## Other formats - [Markdown version](/-/media/files/research/imf-and-g20/2024/imf-fsb-g20-crypto-asset-policy-implementation-roadmap.pdf.md) - [Structured JSON version](/-/media/files/research/imf-and-g20/2024/imf-fsb-g20-crypto-asset-policy-implementation-roadmap.pdf.json) --- ### Market developments - Financial stability risks from crypto-asset markets have not materially changed since the 2023 IMF‑FSB Synthesis Paper (IMF and FSB assessment). - Total crypto-asset market value: - Estimated market value was "$2.2 trillion" as of "30 August 2024". - Bitcoin and ether represent almost "80%" of the crypto-asset total market value. - The total market value is "less than 1%" of global financial system assets. - Crypto-asset trading and derivatives: - Crypto-asset derivatives trading volume was around "$6 trillion" in "May 2024", about three times spot trading volume. - Some trading platforms offer products with very high leverage (up to "125 times") even to retail clients. - Decentralised finance (DeFi): - Total value locked (TVL) across DeFi protocols rose to "$106 billion" in "May 2024" and fell to "$87.5 billion" in "August". - Stablecoins: - Overall stablecoin market value increased to around "$160 billion", up from "$124 billion" in "mid-September 2023". - Tether market value reached "$118 billion" as of "30 August 2024". - Stablecoins’ use for payment and settlement in the real economy remains very limited; use cases appear mostly related to speculation in other crypto-assets. - Uncertainties remain regarding reserve assets due to opaqueness of disclosures. - Unverified reports indicate Tether has reserves of "$97.6 billion" invested directly or indirectly in U.S. Treasuries. - Institutional exposure: - Total assets under management (AUM) of crypto-asset investment products increased rapidly to "$85 billion". - U.S. regulatory approval of spot bitcoin ETPs is noted as a potential driver of rising AUM. - Overall assessment: - Continued growth and increasing interlinkages with the traditional financial system could present systemic risks, underlining the importance of implementing comprehensive policy and regulatory responses. ### Roadmap progress updates and outreach - Implementation status and plans: - Nearly all FSB member jurisdictions have plans to develop new or revise existing regulatory frameworks for crypto-assets and stablecoins, or already have such frameworks in place. - A majority of FSB member jurisdictions and about "half" of the non-FSB Regional Consultative Group (RCG) member countries expect to reach alignment with the FSB Framework by "2025". - Survey findings (FSB January 2024 survey; 73 responses from 24 FSB members and 49 non-FSB members): - 93% of FSB members either have plans in place to develop new or revised frameworks for crypto-assets or already have those frameworks in place. - 88% of FSB members either have plans in place to develop new or revised frameworks for stablecoins or already have those frameworks in place. - 62% of FSB members expect to reach alignment with the CA recommendations by 2025; 60% expect to reach alignment with the GSC recommendations by 2025. - 24% (CA) and 30% (GSC) of FSB members have plans but have yet to commit a date to reach alignment. - Non-FSB EMDEs reported lower alignment expectations by 2025: 56% expect to reach alignment for crypto-assets and 44% for stablecoins. - All FSB members (100%) have existing laws and regulations applicable to at least part of crypto-asset activities; applicability to stablecoins is lower at 61%. - Among non-FSB members: 63% have existing laws and regulations applicable to at least part of crypto-asset activities; 39% have such applicability for stablecoins. - Reported plans to develop new or revised legal and regulatory frameworks: 82% of non-FSB members for crypto-assets and 76% for stablecoins. - AML/CFT regulatory requirements are the most reported existing laws and regulations among FSB members: 90% for crypto-asset activities and 57% for stablecoins. - Outreach and capacity building: - The IMF, FSB, SSBs, and FATF conducted workshops, outreach sessions, knowledge-sharing events, and capacity building programmes across a wide range of jurisdictions beyond the G20. - The IMF conducted regional training courses across its capacity development and training centres located globally and delivered seven week-long “Selected Issues in Fintech Regulation” courses reaching more than 300 supervisors from over 70 different institutions. - FSB RCGs discussed domestic implementation experiences and challenges; RCG Americas took stock of regional practices and established a dedicated expert group. - SSBs and FATF engaged members and non-members through various channels to promote implementation of their standards. - Information sharing and coordination: - The FSB and SSBs continued to act as hubs for information sharing among member authorities. - The FSB, jointly with the IMF, organised a workshop for authorities to share experiences and challenges in implementing the FSB Framework (February 2024; attendance: 75 in-person participants from 34 jurisdictions and over 250 virtual participants from 52 countries). - CPMI and IOSCO examined potential challenges in implementing the Principles for Financial Market Infrastructures (PFMI) with emphasis on cross-border cooperation and identified practical approaches. - Data gaps and DGI 3 Rec 11: - The IMF led the G20 Data Gaps Initiative 3 Recommendation 11 on Digital money to address data gaps on crypto-assets. - Cross-border crypto-asset flows (CBCFs) are not systematically measured by statistical agencies; standard setters and jurisdictional authorities are developing methods to identify and measure CBCFs. - Notable data collection efforts among G20 countries include regulatory reporting imposed on financial institutions and on issuers of stablecoins in the European Union; alternative sources include commercial data providers, household surveys, and blockchain monitoring tools. ### Key implementation experiences and challenges - Cross-border activities from offshore jurisdictions: - Cross-border crypto-asset activities that originate from offshore jurisdictions present elevated regulatory and supervisory challenges and can hinder effectiveness of the FSB Framework when implementation is inconsistent. - Inconsistent implementation may lead to regulatory arbitrage and amplified data gaps, especially when many activities originate from non-FSB member jurisdictions. - If risks increase from cross-border activities originating from jurisdictions without appropriate regulation and supervision, international organisations, SSBs, and jurisdictional authorities may need to consider additional tools to promote implementation beyond the G20 membership. - Non-compliance and enforcement: - The prevalence of non-compliance with applicable laws and regulations significantly undermines efforts to implement the FSB Framework and other international standards on crypto-assets. - Non-compliance may encourage wider regulatory arbitrage, exacerbate data gaps, require greater enforcement resources, and heighten cross-border enforcement challenges. - Common enforcement challenges include deliberate evasion of regulation, commencement of operation before authorisation, lack of a culture of compliance, resource needs for enforcement, and cross-border circumvention through distributed operations. - Cross-border cooperation has supported enforcement: example actions relied on cooperation with authorities from multiple jurisdictions (e.g., September 2023 CFTC action; September 2024 SEC actions). - DeFi and Multifunction Crypto-asset Intermediaries (MCIs): - MCI vulnerabilities mirror traditional finance: leverage, liquidity mismatch, technological and operational vulnerabilities, and interconnections; certain combinations of functions can exacerbate vulnerabilities. - CA Recommendation 9 provides tailored expectations to address amplified vulnerabilities from providers combining multiple functions. - Identification of responsible persons/entities in DeFi can be challenging; where controlling persons/entities are identified, existing regulatory tools can be applied; truly fully decentralised structures with no identifiable intermediaries may fall outside scope while centralised entry points remain regulable. - Global Stablecoins (GSCs) and implementation of GSC Recommendation 9: - GSC recommendation 9 requires GSCs to provide a robust legal claim, have an effective stabilisation mechanism, and satisfy prudential requirements. - Redemption rights: - Jurisdictions vary in approaches: claims against issuer, claims against reserve assets, or combinations; redemption timing and costs policies vary. - Jurisdictions are establishing requirements that all users can redeem directly with the issuer and contingency/operational resilience requirements. - Stabilisation mechanisms and reserve assets: - Reserve assets for single-fiat stablecoins considered include: i) central bank reserves; ii) commercial bank deposits; iii) conservative, high quality and highly liquid securities. - Trade-offs exist (e.g., reducing credit risk can increase concentration or market risk); jurisdictions apply duration limits, concentration limits, and safe custody requirements. - Prudential requirements: - Many authorities establish “own funds” requirements ranging from minimum fixed fiat amounts to incremental requirements of "0.5% to 3%" of outstanding tokens or reserve assets, or combinations thereof. - Liquidity risk management requirements include liquidity buffers, “shortfall reserves”, and contingency planning for distributed ledger disruptions. - Macrofinancial issues and EMDE challenges: - Foreign-currency pegged stablecoins may be used to gain USD exposure, potentially amplifying currency substitution, capital outflows, and circumvention of regulations. - EMDE challenges identified include data collection difficulties, complexity and slowness of legislative/regulatory processes, capacity constraints, lack of consumer awareness, and legal risks due to varying legal treatments. - The IMF recommends assessing monetary stability and financial integrity impacts, ML/TF risks, conducting full feasibility studies, stakeholder engagement, and applying FSB GSC Recommendations and CPMI-IOSCO PFMI principles for cross-border marketed stablecoins. - Measurement and data challenges: - CBCFs are not systematically measured; studies find substantial heterogeneity in CBCF estimates across methodologies. - Pseudonymity and opacity hinder identification of residency and bilateral flows; official estimates via ITRSs are scarce (Brazil cited as an exception). - The Balance of Payments Manual update will cover measurement of capital flows associated with crypto-assets. ### Next steps and policy commitments - Continued support and monitoring by international institutions: - The IMF and the FSB, together with SSBs and other international organisations, will continue to support and promote a globally coordinated and comprehensive policy and regulatory approach to crypto-asset markets. - The IMF will continue to support member countries through capacity development and surveillance and has strengthened coverage of macrofinancial issues in its engagements. - The FSB will conduct a review of the status of implementation of the FSB Framework by "end-2025". - The SSBs will take measures to support their members to implement their relevant standards. - Specific SSB and IO actions and timelines: - IOSCO: pilot assessment of CDA implementation in 2025 and a full assessment in 2026; stocktake findings to be presented to the IOSCO Board in Q4 2024. - BCBS: support members in implementing the final prudential standard for banks’ exposures to crypto-assets ahead of the "1 January 2026" implementation date; finalised disclosure standard with implementation date "1 January 2026". - CPMI and CPMI-IOSCO: continue engagement via workshops and seminars, and exchange practical experiences on PFMI application to stablecoin arrangements. - FATF: call on all jurisdictions to rapidly implement FATF Standards on VAs and VASPs, including the Travel Rule; FATF findings show "75%" of jurisdictions are only partially compliant or are not compliant with FATF requirements based on 130 MERs and FURs since 2019. - Implementation survey summary (participation and status): - Survey response totals: FSB Members: 24; Non-FSB members: 48; Total Responses: 72. - High-level findings: 87% of FSB members have existing laws and regulations partially applicable to crypto-asset activities; among FSB members, 57% have existing laws and regulations partially applicable to stablecoins. - Plans and timing: 92% of FSB members have plans in place to develop new or revised frameworks for crypto-assets and service providers; 87% have plans for stablecoin arrangements. - Expected timing to reach alignment with FSB Framework: for FSB members, 62% expect alignment with CA recommendations by 2025 and 60% expect alignment with GSC recommendations by 2025; among non-FSB members, 67% expect alignment with CA recommendations by 2025 and 59% expect alignment with GSC recommendations by 2025. - Potential tools to address offshore implementation gaps: - Disclosure-based approaches by IOs and SSBs: independent assessments, self-assessments, non-assessment-based publications on activity and market structure, and entity-level publications listing licensed/regulatory status. - Supervisory tools by jurisdictional authorities: heightened governance and AML/CFT expectations, tailored risk management and regulatory reporting when domestic entities deal with offshore providers domiciled in jurisdictions that have not adopted the FSB Framework. *Source: IMF and FSB, Crypto-asset Roadmap Status Report (Executive summary).* ### Executive summary ...................................................................................................... ### imf-fsb-g20-crypto-asset-policy-implementation-roadmap - Executive summary ### Market developments - The IMF and the FSB report that financial stability risks from crypto-asset markets have not materially changed since the 2023 IMF‑FSB Synthesis Paper. - Total crypto-asset market value: - Estimated market value was "$2.2 trillion" as of "30 August 2024". - Bitcoin and ether represent almost "80%" of the crypto-asset total market value. - The total market value is "less than 1%" of global financial system assets. - Crypto-asset trading and derivatives: - Crypto-asset derivatives trading volume was around "$6 trillion" in "May 2024", about three times spot trading volume. - Some trading platforms offer products with very high leverage (up to "125 times") even to retail clients. - Decentralised finance (DeFi): - Total value locked (TVL) across DeFi protocols rose to "$106 billion" in "May 2024" and fell to "$87.5 billion" in "August" (year implied 2024). - Stablecoins: - Overall stablecoin market value increased to around "$160 billion", up from "$124 billion" in "mid-September 2023". - Tether market value reached "$118 billion" as of "30 August 2024". - Stablecoins’ use for payment and settlement in the real economy remains very limited; use cases appear mostly related to speculation in other crypto-assets. - Uncertainties remain regarding reserve assets due to opaqueness of disclosures. - Unverified reports indicate Tether has reserves of "$97.6 billion" invested directly or indirectly in U.S. Treasuries. - Institutional exposure: - Total assets under management (AUM) of crypto-asset investment products increased rapidly to "$85 billion" (period implied 2024), though net inflows have subsided. - U.S. regulatory approval of spot bitcoin ETPs is noted as a potential driver of rising AUM. - Overall assessment: - Continued growth and increasing interlinkages with the traditional financial system could present systemic risks, underlining the importance of implementing comprehensive policy and regulatory responses. ### Roadmap progress updates and outreach - Implementation status: - Nearly all FSB member jurisdictions have plans to develop new or revise existing regulatory frameworks for crypto-assets and stablecoins, or already have such frameworks in place. - A majority of FSB member jurisdictions and about "half" of the non-FSB Regional Consultative Group (RCG) member countries expect to reach alignment with the FSB Framework by "2025". - Outreach and capacity building: - The IMF, FSB, standard-setting bodies (SSBs), and FATF conducted workshops, outreach sessions, knowledge-sharing events, and capacity building programmes across a wide range of jurisdictions beyond the G20. - The IMF conducted regional training courses across its capacity development and training centres located globally. - FSB RCGs discussed domestic implementation experiences and challenges; RCG Americas took stock of regional practices. - SSBs and FATF engaged members and non-members through various channels to promote implementation of their standards. - Information sharing and coordination: - The FSB and SSBs continued to act as hubs for information sharing among member authorities. - The FSB, jointly with the IMF, organised a workshop for authorities to share experiences and challenges in implementing the FSB Framework. - The FSB published a report on cross-border regulatory and supervisory issues of global stablecoin arrangements in emerging market and developing economies (EMDEs). - CPMI and IOSCO examined potential challenges in implementing the Principles for Financial Market Infrastructures (PFMI) with emphasis on cross-border cooperation and identified potential practical approaches. - Data gaps: - The IMF led the G20 Data Gaps Initiative 3 Recommendation 11 on Digital money to address data gaps on crypto-assets. - An IMF stocktaking exercise among G20 and non-G20 FSB jurisdictions showed notable efforts among G20 countries to examine data collection options. - Cross-border crypto-asset flows (CBCFs) are not systematically measured by statistical agencies; standard setters and jurisdictional authorities are developing methods to identify and measure CBCFs. ### Key implementation experiences and challenges - Cross-border activities from offshore jurisdictions: - Cross-border crypto-asset activities that originate from offshore jurisdictions present elevated regulatory and supervisory challenges. - Inconsistent implementation of the FSB Framework may hinder effectiveness and lead to regulatory arbitrage. - Implementation challenges are amplified when many such activities originate from non-FSB member jurisdictions. - If risks increase from cross-border activities originating from jurisdictions without appropriate regulation and supervision, international organisations, SSBs, and jurisdictional authorities would need to consider whether additional tools are needed to promote implementation beyond the G20 membership. - Non-compliance and enforcement: - The prevalence of non-compliance with applicable laws and regulations significantly undermines efforts to implement the FSB Framework and other international standards on crypto-assets. - Non-compliance may encourage wider regulatory arbitrage, exacerbate data gaps, require greater enforcement resources, and heighten cross-border enforcement challenges. - Global Stablecoins (GSCs) and policy approaches: - The FSB Framework recommends that jurisdictions require GSCs to provide a robust legal claim, have an effective stabilisation mechanism, and satisfy prudential requirements. - Jurisdictions are developing detailed regulatory requirements based on the FSB Framework, and approaches vary; authorities should evaluate benefits and costs of potential approaches when developing frameworks. - Macrofinancial issues and EMDE challenges: - For some EMDEs, foreign-currency pegged stablecoins may be used to gain USD exposure, potentially amplifying currency substitution, capital outflows, and circumvention of regulations. - EMDE challenges identified include data collection difficulties, implementation challenges, complexity and difficulty of legislative and regulatory processes, persistent capacity constraints, lack of consumer awareness, and legal risks due to varying legal treatment of crypto-assets. ### Next steps and policy commitments - Continued support and monitoring: - The IMF and the FSB, together with SSBs and other international organisations, will continue to support and promote a globally coordinated and comprehensive policy and regulatory approach to crypto-asset markets. - The IMF will continue to support member countries through capacity development and surveillance and has strengthened coverage of macrofinancial issues in its engagements. - The FSB will conduct a review of the status of implementation of the FSB Framework by "end-2025". - The SSBs will take measures to support their members to implement their relevant standards. *Source: IMF and FSB, Crypto-asset Roadmap Status Report (Executive summary).* ### 1. The top 20 largest holders of US Treasuries 2. Tether reserves compared to largest US and EA MMFs ### imf-fsb-g20-crypto-asset-policy-implementation-roadmap — 1. The top 20 largest holders of US Treasuries; 2. Tether reserves compared to largest US and EA MMFs ### Data sources and notes - Sources: US Department of the Treasury; iMoneyNet; S&P; Tether (unaudited attestation report); FSB calculations. - Charting note: "Weekly fund flows and AUM of crypto-asset funds" presented as Graph 3 with axes labeled "USD mn" and "USD bn". - Flow definition: "Flow means the amount of investments in and out of investment products." ### Key dated events marked on fund-flows timeline - 23 February 2022 — the day before the start of the Russia-Ukraine war. - 9 May 2022 — the day TerraUSD started to significantly decouple from its peg. - 11 November 2022 — the day FTX filed for bankruptcy. - 10 January 2024 — the day the SEC approved 11 spot bitcoin ETPs. ### Items represented or compared - The top 20 largest holders of US Treasuries (data source: US Department of the Treasury). - Tether reserves compared to largest US and EA MMFs (data sources: iMoneyNet; S&P; Tether unaudited attestation report). - Weekly fund flows and AUM for crypto-asset funds plotted over time with vertical markers on the dates above. ### Graphical labels and units preserved exactly - Graph label: "USD mn USD bn" - Graph identifier: "Graph 3" *IMF, FSB, and G20 Crypto-Asset Policy Implementation Roadmap* ### 3. Roadmap progress updates ### 3. Roadmap progress updates ### 3.1. Implementation of policy frameworks - The Roadmap identified four work areas: (i) implementation of policy frameworks; (ii) outreach beyond G20 jurisdictions; (iii) global cooperation and coordination; and (iv) addressing data gaps. - The IMF, FSB, and SSBs have advanced work in all four areas and continued to monitor vulnerabilities, conduct deep-dives into regulatory issues, and provide supplements to existing policies. #### 3.1.1. High-level overview of jurisdictional legal and regulatory developments - The FSB Global Regulatory Framework for Crypto-asset Activities (FSB Framework) consists of CA recommendations and revised GSC recommendations. - The FSB conducted a survey in January 2024 on implementation status and implementation challenges; the survey received 73 responses from 24 FSB members and 49 non-FSB members via the six Regional Consultative Groups (RCGs). - Key survey findings: - 93% of FSB members either have plans in place to develop new or revised frameworks for crypto-assets or already have those frameworks in place. - 88% of FSB members either have plans in place to develop new or revised frameworks for stablecoins or already have those frameworks in place. - A majority of FSB members expect to reach alignment with the FSB Framework by 2025: 62% for crypto-assets and 60% for stablecoins. - Some FSB members are planning to implement the FSB Framework but have yet to commit to a timeline: 24% for crypto-assets and 30% for stablecoins. - Non-FSB members that are EMDEs reported lower alignment expectations by 2025: 56% expect to reach alignment for crypto-assets and 44% for stablecoins. - All FSB members (100%) have existing laws and regulations applicable to at least part of crypto-asset activities; applicability to stablecoins is lower at 61%. - Among non-FSB members: 63% have existing laws and regulations applicable to at least part of crypto-asset activities; 39% have such applicability for stablecoins. - Reported plans to develop new or revised legal and regulatory frameworks: 82% of non-FSB members for crypto-assets and 76% for stablecoins. - AML/CFT regulatory requirements are the most reported existing laws and regulations among FSB members: 90% for crypto-asset activities and 57% for stablecoins. - Risks to financial integrity identified as a ‘very important’ risk: 80% of FSB members and 77% of non-FSB members. - Implementation challenges identified by FSB members (share reporting ‘very important’): - Cross-border coordination and cooperation: 80% - Off-shore service providers: 75% - Regulatory perimeter: 60% - Implementation challenges identified by non-FSB members: - Consumer education: 64% - Data gaps: 60% - Capacity/expertise: 56% #### 3.1.2. FSB: implementation challenges for DeFi and MCIs - The FSB published a report in November 2023 on the financial stability implications of multifunction crypto-asset intermediaries (MCIs). The report found MCI vulnerabilities similar to those in traditional finance: leverage, liquidity mismatch, technological and operational vulnerabilities, and interconnections between entities. Certain combinations of functions could exacerbate these vulnerabilities. - The FSB assessed DeFi and MCI regulatory implications and confirmed that the CA recommendations address vulnerabilities specific to DeFi and MCIs, while noting several implementation challenges for authorities. - Key implementation considerations and challenges: - Persons and entities responsible for operating DeFi activities should be appropriately regulated; robust governance should not be undermined by complex structures that frustrate identification of responsible entities and individuals. - Identification of responsible persons/entities in DeFi can be challenging because some projects seek to evolve to a “completely decentralised operation” by dissolving legal entity/entities; nevertheless, control often exists via dominant voting holdings or maintenance of DeFi protocols. - Once controlling natural persons or entities are identified, authorities can apply existing regulatory tools to address operational fragilities, liquidity and maturity mismatches, leverage, interconnectedness, and misconduct. - If a truly fully decentralised structure with no identifiable intermediaries exists, it may be outside the scope of regulation; authorities may still regulate centralised entry points such as centralised trading platforms, user-interface applications, and wallets. - MCIs often combine proprietary trading, investment functions, client advisory services, and issuance/promoting/distribution of crypto-assets (including stablecoins), creating conflicts of interest and potential non-compliance with segregation requirements typical in traditional finance. - CA Recommendation 9 provides tailored expectations to address amplified vulnerabilities arising from service providers that combine multiple functions, including conflicts of interest. - Non-compliance and ineffective regulation across jurisdictions can hinder comprehensive oversight of MCIs; MCIs may domicile in jurisdictions not consistent with the FSB Framework, undermining regulatory effectiveness elsewhere and creating significant data gaps. #### 3.1.3. SSBs’ work to support implementation of policy frameworks - IOSCO: - Finalised Policy Recommendations for Crypto and Digital Asset (CDA) Markets in November 2023. - Published Policy Recommendations for Decentralized Finance (DeFi) in December 2023. - IOSCO is undertaking a full stocktake survey (issued April 2024) of implementation across its membership; findings will be synthesised into a stocktake note and presented to the IOSCO Board in Q4 2024. - IOSCO plans a pilot assessment of CDA implementation in 2025 and a full assessment in 2026. - IOSCO’s implementation aims include supporting public awareness, encouraging dialogue, prompting jurisdictions to meet CDA Recommendations, and complementing FSB and SSB efforts. - CPMI: - At the G20 request, CPMI and BIS produced a report examining tokenisation in the context of money and other assets, including considerations related to settlement assets and stablecoins. - The CPMI Secretariat is monitoring stablecoin market trends and collected information from 86 jurisdictions in the BIS global CBDC and crypto-assets survey regarding stablecoin use in payments and regulatory approaches; about two out of three responding jurisdictions have or are working on a framework to regulate stablecoins and other crypto-assets. - BCBS: - GHOS endorsed a global prudential standard for banks’ exposures to crypto-assets in December 2022 and tasked the BCBS to continue monitoring bank-related crypto developments. - In December 2023, the BCBS consulted on targeted revisions related to criteria for stablecoins to receive a preferential “Group 1b” regulatory treatment; consultation included reserve asset composition criteria. - The BCBS published the final revised standard in July 2024. - GHOS agreed to defer implementation of the standard by one year to 1 January 2026 to ensure full, timely and consistent implementation. - The BCBS finalised the disclosure standard for banks’ crypto-asset exposures in July 2024 with an implementation date of 1 January 2026; disclosures require qualitative information on crypto-asset activities and quantitative information on exposures and related capital and liquidity requirements. - BCBS reviews in 2023–2024 included: - Risks from crypto-assets using permissionless blockchains; BCBS concluded permissionless blockchains give rise to several unique risks and did not propose adjustments at that time to allow such crypto-assets into preferential “Group 1” treatment. - Risks from banks providing crypto-asset custody services; operational risks underscore the importance of full implementation of BCBS operational resilience and operational risk principles. - Role of banks as issuers of stablecoins; risks depend on product structures and jurisdictional laws, and are broadly captured by the Basel Framework while monitoring continues. - CPMI-IOSCO: - July 2022 guidance “Application of the Principles for Financial Market Infrastructures (PFMI) to stablecoin arrangements” clarifies that systemically important stablecoin arrangements performing a transfer function are expected to observe relevant PFMI principles, elaborating on governance, comprehensive risk management, settlement finality, and money settlements. - CPMI-IOSCO is analysing risks associated with multicurrency and asset-linked stablecoin arrangements and is stock-taking how jurisdictions are accounting for the July 2022 guidance when developing or amending frameworks. #### 3.1.4. FATF roadmap to strengthen standards for virtual assets - FATF adopted a Roadmap in February 2023 to accelerate implementation of FATF Standards for virtual assets (VAs) and virtual asset service providers (VASPs) due to slow and uneven global progress. - FATF actions and findings: - March 2024: FATF published a table setting out steps taken towards implementing Standards by FATF members and jurisdictions with materially important VASP activities, focusing on jurisdictions with materially important VASP activities per a risk-based approach. - July 2024: FATF published a fifth annual Targeted Update based on 2024 survey responses (147 responses) and results from completed and published mutual evaluation reports (MERs) and follow-up reports (FURs) assessing compliance with Recommendation 15 (R.15) as of April 2024. - Based on 130 FATF MERs and FURs since 2019, 75% of jurisdictions are only partially compliant or are not compliant with the FATF’s requirements; this is identical to April 2023 (75% partially compliant or non-compliant; 73 of 98). - The 2024 survey identifies some progress since 2023, such as the number of jurisdictions that have registered or licensed VASPs in practice. - The Travel Rule implementation remains insufficient; nearly one third of survey respondents, including some that assessed VAs/VASPs as high risk, have not passed legislation implementing the Travel Rule; supervision and enforcement remain low even where legislation exists. - FATF highlights serious concerns that poor compliance enables illicit use of VAs, including by DPRK, scammers, terrorist groups, and other illicit actors. - The report recognises increased adoption and use of stablecoins, including for illicit activities, and notes DeFi currently accounts for a relatively low percentage of VA activity but requires monitoring. - FATF calls on all jurisdictions to rapidly implement FATF Standards on VAs and VASPs, including the Travel Rule, in line with the FATF Roadmap. ### 3.2. Outreach beyond G20 jurisdictions - The IMF, FSB, SSBs, and FATF have organised workshops, outreach sessions, knowledge sharing events, and capacity building programmes focused on engaging a wide range of non-FSB member jurisdictions. #### 3.2.1. IMF outreach activities - June 2024: The IMF held a knowledge exchange workshop in Africa with FSB input to help regulatory authorities respond to macroeconomic and regulatory challenges of crypto-assets. The event targeted 13 “crypto-relevant countries” from western, eastern, and southern Africa and senior officials from regulatory authorities. - Workshop findings and participant observations: - Crypto-asset adoption remains low in the region, with notable exceptions; higher adoption in some instances is linked to macroeconomic circumstances such as rising inflation and higher exchange rate volatility that may drive use of crypto-assets for trade settlement. - Low adoption sometimes linked to technological impediments such as lack of communication infrastructure and technical know‑how to obtain crypto-assets via exchanges/CASPs. - Crypto-assets are largely used as a store of value, speculative investment, and for portfolio diversification; use for payments is low across regions. - Domestic currency‑denominated stablecoins for payment purposes are gaining interest in some countries. - Stablecoins mainly used to access the crypto-asset ecosystem and as a store of value to hedge against weak domestic macroeconomic fundamentals. - In a few countries crypto-assets are used for remittances and settling foreign trade, but to a very limited extent. - Participants endorsed robust monetary and fiscal policy and safe, efficient payment systems as key to limit cryptoisation. - A few countries prohibit institutional investors (pension funds and collective investment schemes) from using crypto-assets; several countries permit use by both types of investors. - Financial stability risks are limited given banks and other financial institutions generally have low exposure to crypto-assets and high awareness of macro-financial risks. - Jurisdictional policy stages vary: some are advanced in developing domestic frameworks, many are in process, and a few are in “wait-and-see” mode. - Several countries rely on existing frameworks to advance crypto-asset policies; a few consider new stand-alone regulatory regimes. - None of the participating countries aim to grant crypto-assets legal tender status. - IMF capacity building and integration into surveillance: - The IMF delivered seven week-long “Selected Issues in Fintech Regulation” courses since publication of the FSB Framework, reaching more than 300 supervisors from over 70 different institutions; sessions included FSB and IOSCO Secretariat contributions. - The IMF delivered bilateral technical assistance programs providing targeted support such as legislative reviews and identifying areas to strengthen existing regulatory frameworks. - The IMF has integrated crypto-asset policy work into surveillance through Financial Sector Assessment Programs (FSAPs) and Article IV assessments where crypto-asset activity could impact financial stability or become macro-critical; notable assessments include the Bahamas FSAP, the Japan FSAP, and the Kazakhstan FSAP. *Source: IMF-FSB-G20 Crypto-asset Policy Implementation Roadmap — Section 3: Roadmap progress updates.* ### Annex 2 ### Annex 2 ### IMF guidance, surveillance, and technical assistance on crypto-assets - The IMF developed a guidance note to help country teams decide on the coverage of crypto-assets in Article IV consultations, including: - Guidance on whether crypto-assets activities are material and should be covered. - Key risks to be analysed. - Possible policy recommendations. - Complementary materials: a taxonomy of crypto-assets, a questionnaire, and country examples. - The IMF will organise in-reach sessions with country teams to raise awareness of when and how to include crypto-assets as part of Article IV surveillance exercises. - The IMF has advised member countries on potential legal, financial stability, monetary stability, and fiscal risks associated with granting legal tender status to crypto-assets. - The IMF has recommended that member countries put in place sound and comprehensive legal and regulatory frameworks to adequately regulate and supervise crypto-assets in their markets. - The IMF provides bilateral and regional training and bilateral technical assistance on AML/CFT considerations related to crypto-assets and crypto-asset service providers, covering: - Legislative review. - Conduct of money laundering and terrorism financing risk assessments. - AML/CFT risk-based supervision of crypto-asset service providers. - The IMF has conducted regional trainings in the Asia-Pacific, Central Asia, Middle East, North Africa, Sub-Saharan Africa, and Caribbean regions; bilateral trainings in Albania, Ukraine, Vietnam, and Zimbabwe; and bilateral technical assistance including legal drafting support (Namibia and Suriname) and advice on risk assessment and AML/CFT risk-based supervision (Albania and Georgia). - Financial integrity issues relevant to the crypto-asset sector have been highlighted in recent Article IV consultations and FSAPs in multiple jurisdictions where the sector presents material money laundering and terrorism financing risks. - IMF policy advice has called for aligning domestic legal frameworks with the revised FATF standards on VAs and VASPs, updating authorities’ understanding of money laundering and terrorism financing risks, and ensuring effective risk mitigation (for instance, through adequate market entry controls for crypto-asset service providers and improved risk-based supervision). ### Implementation challenges for EMDEs (Box 1) - Data collection remains a serious challenge; regulation is one option to collect timely, consistent and reliable data, but best practice data templates are needed. - Regulatory approaches have shifted from “wait-and-see” and restrictive approaches to comprehensive regulations, but implementation remains challenging; policy recommendations from the IMF, FSB and SSBs were helpful in shifting the approach. - Legislative and regulatory processes can be complex, difficult, and slow; national risk assessments helped highlight impacts of crypto-assets, but uncertainty and technical complexity can delay finalisation and effective dates of regulation. - Persistent capacity challenges span authorities and the wider industry, including banks and other financial institutions; capacity and resource constraints are common concerns. - Consumer awareness and education are important; many retail consumers remain attracted by potential wealth effects without understanding risks including market manipulation and investor protection issues. ### FSB outreach and regional coordination (RCGs and RCG Americas) - The FSB has five active RCGs representing 70 jurisdictions; each RCG meets twice a year and discusses financial stability topics. - Since October 2023, five of the six RCGs discussed crypto-assets with a focus on implementation of the FSB Framework within their regions. - Regional findings and examples: - EMDE members in Asia and Africa highlighted resource constraints and concerns about macro-financial stability impacts if crypto-asset activities increase. - In Europe, most EU members are preparing for Markets in Crypto-assets Regulation (MiCAR), with stablecoins applying since 30 June 2024 and other crypto-asset activities applying from 30 December 2024. - RCG Americas established a dedicated group of experts to take stock of developments and regulations within the region; in June 2024 RCG Americas members discussed the stocktake and ways to ensure effective, flexible, and coordinated implementation. - RCG Americas Crypto-asset Working Group (Box 2) findings from a survey of 15 member jurisdictions: - Many participants have undertaken formal risk assessments and generally view current financial stability risk as low due to relatively low consumer adoption and low interconnection with traditional financial intermediaries, but noted potential for severe implications if adoption and interconnectedness rise without appropriate regulation. - Most jurisdictions rely on existing rules to regulate crypto-assets including stablecoin arrangements; some have separate regimes subject to ongoing improvements. - Common challenges to implementing the FSB Framework: (i) lack of institutional capacity and expertise, (ii) supervision and enforcement challenges due to cross-border nature of activities and regulatory arbitrage, and (iii) limited data collection or capability to obtain data. - Suggested remedies include local and regional working groups for information exchange and establishing Memoranda of Understanding to assist cooperation and information exchange. ### SSBs outreach activities (CPMI, BCBS, IOSCO) - CPMI: - Uses workshops, seminars at regional associations, and an e-learning platform for central banks and regulators to engage non-CPMI central banks and authorities on CPMI and CPMI-IOSCO policy and standard-setting work on stablecoin arrangements. - BCBS: - Leverages the Basel Consultative Group to engage non-Committee members on policy and supervision issues, including crypto-assets and DeFi. - IOSCO: - Uses surveys and stakeholder roundtables to engage experts from academia, technology providers, market participants, and the broader industry on crypto-assets and DeFi. - Conducts outreach and capacity building through IOSCO Regional Committees and engages with Affiliate Members Consultative Committee (AMCC). ### FATF outreach and capacity building on R.15 - The FATF has conducted outreach and bilateral assistance to jurisdictions, particularly those with lower capacity or materially important VASP activity, to support compliance with R.15. - December 2023: FATF held the Virtual Assets Contact Group (VACG) symposium with more than 600 participants from FATF and FATF-style Regional Body members on key R.15 implementation issues (risk assessments, regulatory frameworks, Travel Rule implementation); a further symposium is expected later in 2024. - April 2024: FATF co-hosted a workshop with IOSCO Asia Pacific Hub to collaborate with other IOs on R.15 implementation outreach. - VACG April 2024 hybrid meeting brought together VACG members, FSRB Secretariats, SSBs, and private sector representatives to discuss regulatory and enforcement progress and challenges, emerging risks and trends, and ways to enhance outreach and assistance. - The FATF and VACG will continue supporting jurisdictions, particularly lower-capacity jurisdictions and those with materially important VASP activity, in collaboration with FSRB Secretariats and relevant IOs and SSBs. ### Global coordination, workshops, and cross-border issues - FSB-IMF workshop (February 2024), co-hosted with the U.S. Office of the Comptroller of the Currency: - Aim: improve understanding of the FSB Framework and share implementation experiences and challenges. - Attendance: 75 in-person participants from 34 jurisdictions and over 250 virtual participants from 52 countries. - Targeted discussion topics: (i) regulatory approaches for CASPs, (ii) cross-border enforcement, (iii) stablecoins, (iv) interlinkages between crypto-asset and traditional financial systems, (v) data gaps, (vi) cross-border activities, and (vii) IMF technical assistance and capacity building. - Workshop outcomes and observations: - Confirmed that the FSB Framework and SSB standards provide comprehensive coverage of key elements for regulation and supervision of crypto-asset activities. - Discussed custody and exchange operations as services closely related to risk amplification and conflicts of interest. - Jurisdictions shared approaches to implement GSC Recommendation 9 on redemption rights, stabilisation mechanism, and prudential requirements. - Strengthening cross-border regulation, supervision, and enforcement remains a challenge; participants stressed leveraging existing cooperation and information-sharing arrangements such as the IOSCO MMoU and EMMoU. - EMDE participants stressed the importance of implementing and enforcing AML/CFT requirements and vigilance regarding offshore activities. - Direct connections between crypto-asset and traditional financial markets remain limited; some jurisdictions are developing reporting or regulations for banks to disclose interlinkages with crypto-assets and to manage related risks. - EMDEs reported benefits from technical assistance and capacity building projects, including FSAP assessments that supported action plans to build capacity and develop regulatory frameworks. ### Cross-border regulatory and supervisory issues of stablecoins in EMDEs - The FSB published a report in July 2024 on cross-border regulatory and supervisory issues of global stablecoin arrangements in EMDEs, with key findings: - EMDEs could be exposed to macro-financial risks from the use of foreign currency-pegged GSCs, which can destabilise financial flows and strain fiscal resources. - Despite data gaps, the report suggests relatively higher interest in and activity related to stablecoins in EMDEs compared to advanced economies. - Drivers of higher stablecoin activity in EMDEs vary by macroeconomic and demographic factors of individual jurisdictions. - EMDEs may consider additional measures beyond the global regulatory baseline depending on country-specific circumstances. - The FSB will continue exploring additional initiatives to facilitate cross-border cooperation for EMDEs and to promote implementation of the FSB GSC recommendations. ### Cross-border coordination for stablecoin arrangements (CPMI-IOSCO) - CPMI-IOSCO examined challenges in implementing PFMI Responsibilities for stablecoin arrangements primarily used for payments, particularly Responsibility E (cooperation with other authorities), noting: - Certain features of stablecoin arrangements may impede authorities’ ability to observe PFMI Responsibilities where broader ranges of relevant authorities exist domestically and across jurisdictions, and where multiple entities within a service provider perform critical roles. - CPMI-IOSCO identified potential practical approaches authorities may take to address these challenges while carrying out their responsibilities. ### Addressing data gaps and DGI 3 Rec 11 stocktaking - As part of G20 Data Gaps Initiative 3 (DGI 3) Recommendation 11 on Digital money, the IMF conducted a stocktaking exercise among G20 and non-G20 FSB jurisdictions; findings were discussed at the G20 DGI 3 Rec 11 workshop organised by the IMF with the Central Bank of Türkiye in Istanbul during 30 April – 2 May 2024. - The stocktaking survey covered three interconnected blocks: (i) regulation, (ii) data collection, and (iii) alternative data sources on crypto-assets used as means of payment. - Notable data collection efforts among G20 countries include: - Regulatory, financial-stability focused reporting imposed on financial institutions. - Regulatory reporting imposed on issuers of stablecoins in the European Union. - Data derived from the International Transaction Reporting System (ITRS) and from tax authorities. - Alternative and non-regulatory data sources being used or considered: - Commercial data providers to estimate crypto-asset usage for macro-financial and financial stability analysis. - Household surveys to gain detailed insights into investor profiles and behaviours. - Blockchain monitoring tools to support AML/CFT efforts. - A flexible, best-effort approach to collecting data on stablecoins and other crypto-assets by G20 and non-G20 FSB jurisdictions, with gradual emphasis on data sharing, is under consideration. - A potential future cross-border data sharing model could involve participating countries reporting, as feasible and appropriate, residents’ holdings of foreign crypto-assets and holdings of domestic crypto-assets by non-residents; however, data may differ in methodologies and sources and may not be comparable, so further work is needed to develop precise and feasible methodologies to gather data and measure crypto-asset activity. *Source: Annex 2, IMF–FSB–G20 Crypto-Asset Policy Implementation Roadmap.* ### 4. Key implementation experiences and challenges ### 4. Key implementation experiences and challenges ### 4.1. Regulation of cross-border activities from offshore jurisdictions — Implementation gaps: risks and challenges - The IMF and FSB identify four key areas requiring targeted follow-up: (i) regulation of off-shore crypto-asset activities; (ii) non-compliance and enforcement; (iii) GSC recommendation 9 dealing with redemption rights, stabilisation mechanisms, and prudential requirements; and (iv) macro-financial issues. - The borderless nature of crypto-assets allows issuers and service providers to operate and provide cross-border activities from offshore jurisdictions, including from jurisdictions where the issuer or service provider is not licensed/registered, regulated, or supervised.41 42 - When global implementation is inconsistent, access to cross-border activities from offshore jurisdictions may hinder the effectiveness of the FSB Framework. - Cross-border crypto-asset activities may continue to grow in offshore jurisdictions that do not effectively regulate and supervise them to an extent that may threaten global financial integrity and stability. - Specific challenges when offshore jurisdictions do not fully implement a framework consistent with the FSB Framework and relevant international standards (such as the FATF International Standards on Combatting Money Laundering and the Financing of Terrorism and Proliferation): - Jurisdictions where activity takes place may face challenges in obtaining information or enforcing regulations against non-compliant issuers and service providers. - These challenges are especially acute when authorities in the offshore jurisdiction do not have comprehensive regulation, lack capacity to enforce their regulatory framework or supervise all relevant issuers/service providers, or lack the ability to engage in cross-border cooperation arrangements.43 - Aggregating data across jurisdictions can be hindered, limiting monitoring of potential global financial stability risks. - Data gaps arising from offshore jurisdictions with significant cross-border crypto-asset activities contribute to these monitoring and stability challenges. ### 4.1.2. Tools to address risks and challenges - The IMF and FSB emphasize that implementation of the FSB Framework and SSB standards, including robust supervision and enforcement, is important to mitigate risks from cross-border crypto-asset activities originating in offshore jurisdictions. - The FSB and the IMF are prioritising engaging non-FSB members through various venues, including technical assistance by the IMF and engagement with the FSB RCGs. - The IMF has incorporated in its surveillance tools — Article IV consultations and FSAPs — the policy responses developed by the IMF, FSB, and SSBs. This integration allows the IMF to assess advances made in the application of crypto-asset policies in jurisdictions where such assets may acquire systemic significance. - If cross-border crypto-asset activities continue to grow in offshore jurisdictions that do not regulate and supervise them to an extent that may threaten global financial stability, jurisdictional authorities, IOs, and SSBs may need to consider whether additional tools are needed to promote implementation beyond the FSB membership. - Based on past experiences, two types of potential tools are presented that jurisdictional authorities, IOs, and SSBs may consider to mitigate risks from implementation gaps: - Disclosure-based approaches by IOs and SSBs: - IOs and SSBs have, in the past, published findings or data concerning the progress of jurisdictional regulatory initiatives. - Such disclosures may provide incentives for implementing relevant international standards and encourage jurisdictions that do not yet have a plan for implementing such standards to develop one. - Disclosures may provide more transparency to the market and the public on implementation progress. - In some cases, a disclosure approach can incorporate an overview of the materiality of the activity under review and help to identify jurisdictions where this activity is occurring. - Disclosure-based tools are commonly used by IOs and SSBs for the purpose of promoting the implementation of international standards. - Disclosure-based tools may take various forms, depending on the objective and available resources; these forms are not mutually exclusive and may be applied in combination, including with supervisory tools. *IMF and FSB — Crypto-asset Policy Implementation Roadmap (section 4: Key implementation experiences and challenges).* ### Box 3: Various disclosure-based tools that may be applied by IOs and SSBs ### Box 3: Various disclosure-based tools that may be applied by IOs and SSBs ### Disclosure-based tools and entity-level publications - Independent assessment - Conducted by an international organisation (or several jointly) to assess the status of jurisdictional implementation of relevant international standards. - Generally leads to a published report. - May be used to identify jurisdictions that materially deviate from international standards. - Self-assessment by jurisdictions - Jurisdictions self-assess consistency of regulatory and supervisory practices with relevant international standards based on questions developed by the relevant IO(s). - Country responses are published largely as submitted. - Responses can inform collecting IOs and SSBs for further initiatives. - Non-assessment-based publications - IOs and SSBs may publish reports on activity and market structure across jurisdictions without assessing implementation consistency. - These reports can indicate overall adoption and where jurisdictions have a material footprint related to a specific topic, helping identify potential sources of risks and challenges. - They do not include any assessment of jurisdictional implementation against the relevant international standard. - Entity-level publications - Offshore issuers and service providers should disclose their home jurisdiction (where their head office is based). - IOs and SSBs may coordinate publication of lists of issuers and service providers licensed and regulated in an identified home jurisdiction and, as appropriate, those who refuse to evidence headquarters (and regulation). *The report notes that some authorities already publish lists of entities they believe are operating illegally in their jurisdictions.* ### Specific supervisory tools by jurisdictional authorities - Supervisory approaches depend on domestic regulatory and supervisory frameworks and vary by jurisdiction. - Authorities may apply heightened expectations on governance, risk management, AML/CFT preventive measures, and third-party risk management for onshore supervised entities that deal with offshore issuers/service providers located in jurisdictions that have not implemented the FSB Framework or other relevant international standards. - Tools may include tailored risk management or regulatory reporting requirements when domestic financial entities or regulated service providers deal with offshore service providers domiciled in jurisdictions that have not (yet) adopted the FSB Framework and/or relevant SSBs’ standards. ### Data challenges in identifying priority areas - The process to identify jurisdictions with material crypto-asset activities depends on comprehensive and accurate data, but significant challenges remain: - Non-compliance and varying degrees of implementation progress contribute to lack of availability of relevant off-chain data. - Reliability and accuracy are limited because data from service providers are mainly self-reported and supervisors often lack capabilities to verify accuracy. - Public blockchain data have limitations: pseudonymity can make identifying ultimate users or originating jurisdictions difficult or sometimes impossible. - Implementation of the FSB Framework and ongoing initiatives can help close these data gaps and improve data accuracy and comprehensiveness. - Example effort: FATF produced a table identifying twenty jurisdictions (non-FATF members) with materially important VASP activity and noted their implementation status of FATF’s Standards on VAs and VASPs (Recommendation 15). Jurisdictions were classified as having materially important VASP activity based on: - Jurisdictions with a materially important VASP that contributes 0.25% or more of global trading volume; and - Jurisdictions with a large virtual asset user base with over 1 million users. - The FATF publication provides a starting point despite data and methodology limitations. ### Non-compliance and enforcement challenges — overview - Some jurisdictions’ existing laws and regulatory frameworks apply in whole or in part to crypto-asset activities, yet some issuers and service providers operate in non-compliance. - Intermediaries and MCIs often fail to obtain required registrations, licenses, or authorisations, and frequently exhibit weak governance, inadequate risk management, and absent or deficient disclosures. - Non-compliance undermines implementation of the FSB Framework and other international standards and may encourage wider non-compliance and regulatory arbitrage. - Enforcement actions initiated over several years have addressed non-compliance, protecting investors and clarifying regulatory status; substantial progress in enforcement helps promote compliance pressure on market participants. ### Common enforcement challenges (behavioural and market features) - Deliberate evasion of regulation - Market participants may label/mislabel or structure activities to evade regulation or seek lighter regulation due to varying legal/regulatory classification across jurisdictions. - Some providers claim full decentralisation while a centralised body controls governance. - Providers may obscure or hide service locations. - Authorities should evaluate facts and circumstances and apply laws consistent with the FSB Framework’s principle of “same activity, same risk, same regulation” and technology neutrality. - Commencement of operation before authorisation - FSB CA recommendation 1 and GSC recommendation 10 require meeting applicable regulatory, supervisory, and oversight requirements before commencing operations. - Market participants often commence operations without authorisation; authorities may need to bring enforcement actions. - Enforcement challenges include significant governance, risk management, and infrastructure gaps that require restructuring and substantial supervisory resources. - Example: De Nederlandsche Bank (DNB) fined companies for operating in the Netherlands without legally required registration. - Lack of a culture of compliance - Crypto-asset intermediaries often lack mature compliance and financial risk management culture. - Start-ups may scale rapidly without developing compliance policies or allocating sufficient compliance resources. - Some firms may intentionally forgo compliance as a cost-saving, requiring authorities to have powers and tools to enforce sound compliance and risk management and to cause non-compliant firms to cease operations. ### Impact of non-compliance and enforcement challenges - Non-compliance exacerbates data gaps - Non-compliant service providers often fail to fulfil record-keeping and data reporting obligations, worsening data gaps and hampering oversight of financial stability, misconduct, and financial integrity risks. - Public blockchain data have significant limitations and cannot substitute for verified reporting; large amounts of activity occur off-chain on centralised service providers. - Resource needs for greater use of enforcement - Authorities need sufficient resources for enforcement, especially smaller jurisdictions with less well-resourced authorities. - Some jurisdictions have specialised enforcement units for crypto-asset activities. - Authorities need access to data, analytical tools (including for blockchain data), techniques, and personnel with expertise for investigatory and enforcement activities. - Blanket bans can make enforcement costly and limited and can be circumvented, creating cross-border spill-over effects. - Non-compliance and cross-border activities - Borderless nature and pseudonymity/anonymity of crypto-asset markets exacerbate non-compliance issues; funds can be moved easily and transaction records obscured. - Some providers distribute operations and personnel across locations to evade enforcement. - Example: Binance pleaded guilty to violating numerous U.S. laws through deliberate efforts to serve the U.S. market without required controls. - Cross-border cooperation advances enforcement: September 2023 CFTC action relied on cooperation with authorities from fourteen jurisdictions; September 2024 SEC actions relied on cross-border cooperation in crypto-related investigations. - FSB CA and GSC Recommendation 3: authorities may benefit from cooperation, coordination, and information sharing; memoranda of understanding can support cross-border investigations. - Jurisdictions should exercise powers to cooperate on crypto-assets as they do for traditional financial markets and seek new laws/practices where cooperation powers are limited. ### GSC recommendation 9 — implementation experiences for General Stablecoins (GSCs) - Purpose: promote consistent and effective regulation of GSCs across jurisdictions with flexibility for domestic approaches; continued focus on implementation given potential financial stability risks from stablecoin growth. - Redemption rights - GSC recommendation 9: require GSC arrangements to provide a robust legal claim to all users against the issuer and/or underlying reserve assets. - Approaches vary: - Some jurisdictions require user claims against the issuer’s reserve assets (and in some cases also on the issuer when reserves are insufficient). - Other jurisdictions require claims against the issuer, with reserve-asset claims if the issuer cannot meet redemptions. - Some jurisdictions align user-claim approaches with existing frameworks for similar instruments (e.g., e-money issuers). - Redemption processes and timing: - Some jurisdictions define a specific number of days to meet redemption requests; others provide discretion depending on the issuer’s business model. - Redemption costs: - Some jurisdictions allow redemption fees reflecting only costs incurred to process redemptions, including AML/CFT compliance costs. - Some jurisdictions prohibit redemption fees due to risks of frictions and encouraging secondary-market selling that could cause de-pegging. - Role of intermediaries: - Many stablecoins rely on secondary markets; jurisdictions are establishing requirements that all users can redeem directly with the issuer and contingency/operational resilience requirements to ensure redemptions can be met even under infrastructure failure. - Jurisdictions are establishing licensing or registration requirements for stablecoin intermediaries; in some, intermediaries must be licensed or registered as payment service providers. - Stabilisation mechanisms - For reserve asset-based stabilisation, GSC recommendation 9 requires reserve assets to be “conservative, high quality and highly liquid assets.” - Jurisdictions consider three groups of eligible reserve assets for single-fiat stablecoins: - i) central bank reserves; ii) commercial bank deposits; iii) conservative, high quality and highly liquid securities. - Trade-offs: - Addressing one risk (e.g., credit risk) can increase another (e.g., concentration or market risk). - Risk management: - Many jurisdictions narrow eligible asset types compared to bank HQLA requirements and implement duration limits to address market risk. - Concentration limits are adopted where non-government securities or commercial bank deposits are allowed. - Safe custody requirements: segregated reserve asset accounts, bankruptcy-remote legal structures, rules on account location and custodian types, reconciliation, audit, and reporting requirements. - Prudential requirements - Many authorities establish “own funds” requirements for stablecoin issuers to absorb losses: - Requirements include minimum fixed fiat amounts, incremental requirements that range from 0.5% to 3% of outstanding tokens or reserve assets, or combinations of both. - Some jurisdictions leverage e-money prudential frameworks; others apply more stringent capital for higher-risk reserve asset business models. - Supervisors can increase capital requirements based on size, complexity, risks, and stress test outcomes. - Liquidity risk management requirements: - Liquidity buffers, “shortfall reserves” for unexpected outflows due to operational risks, fraud, or mismanagement. - Contingency planning to meet redemptions in the event of distributed ledger disruption. ### Macrofinancial issues and challenges - IMF strategic guidance - The IMF offers guidance on holistic regulatory frameworks for crypto-assets. - The 2023 IMF paper "Elements of effective policies for crypto assets" delineated nine fundamental elements to address policy objectives focused on macrofinancial stability, consumer protection, and market and financial integrity. - The nine elements include, among others: safeguarding monetary sovereignty and stability by not granting crypto-assets official currency or legal tender status; analysing and disclosing fiscal risks and adopting unambiguous tax treatment of crypto-assets; and establishing international collaborative arrangements to enhance supervision and enforcement of crypto-asset regulations. - Implications for fiscal policy from crypto-assets - Crypto-assets can increase public finance risks via financial sector exposures, lack of tax clarity, and extra-territorial nature of crypto-assets; granting official currency or legal tender status would amplify fiscal risks. - IMF country advice focuses on avoiding contingent liabilities from trust funds, special purpose vehicles, and state-owned enterprises linked to crypto adoption. - Examples: - Central African Republic: IMF program conditionality includes preparation of a fiscal risk statement on the Sango platform to disclose fiscal commitments and assess fiscal effects. - El Salvador: IMF team support to assess fiscal risks from Fidebitcoin (a public trust fund) and Chivo (an e-wallet). - IMF analytical work on implications for fiscal operations of digital money and crypto-assets will provide more granular data for policy advice and capacity development. - Measurement of cross-border crypto-asset flows (CBCFs) - CBCFs are not systematically measured by statistical agencies. - Studies (Cardozo et al. (2024); Cerutti et al. (2024)) find substantial heterogeneity in CBCF estimates across methodologies. - Bilateral CBCFs can be poorly estimated due to pseudonymity and opacity, making residency of market participants difficult to trace. - Official estimates via International Transaction Reporting Systems (ITRSs) are scarce; the Brazilian case is a notable exception (Brazil’s Central Bank uses FX contract data to identify resident/non-resident parties). - Lack of official statistics has prompted various methods by standard setters, authorities, and academics; global consensus and concerted effort are required to reach common measurement and monitoring approaches. - The Balance of Payments Manual update will cover measurement of capital flows associated with crypto-assets. - Implications of foreign-denominated stablecoins for EMDEs - Foreign currency-pegged stablecoins could provide a store of value insulated from domestic inflation or depreciation, potentially reducing holdings of domestic currency and domestic bank deposits, amplifying currency substitution and capital outflows in negative shocks. - If CFMs cover other flows but not crypto-asset transactions, adoption of foreign currency-pegged stablecoins may be used for circumvention. - IMF advice to member countries includes assessing monetary stability and financial integrity impacts, ML/TF risks and mitigating measures, and targeted measures for EMDEs. - IMF recommends full feasibility studies and stakeholder engagement before introducing stablecoins and applying FSB GSC Recommendations and CPMI-IOSCO principles for financial market infrastructures for cross-border marketed stablecoins. *Source: IMF-FSB-G20 Crypto-Asset Policy Implementation Roadmap* ### 5. Next steps ### 5. Next steps ### Global coordination and institutional actions - The IMF and the FSB, together with the SSBs and other IOs, will continue to support and promote a globally coordinated and comprehensive policy approach to crypto-asset markets. - The IMF will: - Continue to support member countries through regional training and bilateral technical assistance programs in close coordination with the SSB Secretariats. - Continue to advance the integration of policies for crypto-assets in its surveillance work. - The FSB will: - Conduct a review of the status of implementation of the FSB Framework at the jurisdictional level by end-2025. - Continue to engage with a wider set of jurisdictions beyond its membership, including through the RCGs. - IOSCO will: - Promote prompt implementation of its policy recommendations to deliver investor protection and market integrity outcomes. - Continue implementation of its CDA Recommendations and targeted efforts on the DeFi Recommendations. - Pilot an assessment methodology with a subset of IOSCO jurisdictions in 2025 and conduct a full assessment of the CDA recommendations as part of IOSCO’s longstanding AC processes. - The BCBS will: - Support members in implementing the final prudential standard for banks’ exposures to crypto-assets ahead of the 1 January 2026 implementation date. - Continue to monitor and assess bank-related developments in crypto-asset markets and monitor banks’ exposures to crypto-assets through its bi-annual data collection exercise. - The CPMI and CPMI-IOSCO will: - Use workshops and seminars at regional associations or groups of central banks to engage non-CPMI central banks and relevant authorities on policy and standard-setting work on stablecoin arrangements. - Continue to exchange practical experience and challenges that jurisdictions face, with a focus on the July 2022 CPMI-IOSCO guidance. ### Implementation survey — participation and status - Survey response totals: - FSB Members: 24 - Non-FSB members: 48 - Total Responses: 72 - High-level findings on regulatory coverage and gaps: - 87% of FSB members have existing laws and regulations partially applicable to crypto-asset activities. - Among FSB members, 57% have existing laws and regulations partially applicable to stablecoins, while 39% reported that existing laws and regulations do not apply to stablecoins. - 63% of non-FSB members have existing laws and regulations covering at least part of crypto-asset activities; this percentage decreases to 39% for stablecoins. - Existing regulations are more likely to cover broader crypto-asset activities than stablecoins; regulatory gaps are more frequent for stablecoins. - FSB members have identified fewer regulatory gaps compared to non-FSB members. ### Policy development stages and expected alignment timelines - Plans and progress: - 92% of FSB members have plans in place to develop new or revised frameworks for crypto-assets and service providers. - 87% of FSB members have plans in place to develop new or revised frameworks for stablecoin arrangements. - Comparable figures for non-FSB members are 84% (crypto-assets and service providers) and 75% (stablecoin arrangements). - Among jurisdictions with plans, most FSB members have entered public consultation or drafting detailed technical regulations: - 78% for broader crypto-asset activities. - 73% for stablecoins. - Non-FSB members are more often still in the legislative drafting/debate period, with a smaller portion having started drafting detailed regulations, rules, or technical standards. - Expected timing to reach alignment with FSB Framework: - For FSB members: - 62% expect to reach alignment with the CA recommendations by 2025. - 60% expect to reach alignment with the GSC recommendations by 2025. - 24% (CA) and 30% (GSC) have plans but have yet to commit a date to reach alignment. - Among those aiming for alignment by end-2025, alignment with CA recommendations is expected earlier (many by end-2024) than with GSC recommendations (tending toward end-2025). - For non-FSB members: - 67% expect to reach alignment with the CA recommendations by 2025. - 59% expect to reach alignment with the GSC recommendations by 2025. - Splitting non-member responses shows EMDEs expect lower shares: 56% (CA) and 44% (GSC) expect to reach alignment by 2025. ### Regulatory tools and current applicability - Most commonly applicable requirements (among respondents): - AML/CFT requirements: 90% applicable for crypto-assets; 57% applicable for stablecoins. - Fraud-related requirements: 71% among FSB members. - Licensing/registration/authorisation: 71% among FSB members. - Consumer protection: 67% among FSB members. - Least commonly applicable requirements (among FSB members): - Recovery and resolution planning: 24%. - Client funds protection: 38%. - Prudential requirements: 38%. - General observations: - Applicability of AML/CFT requirements is significantly higher among FSB members than non-FSB members across the 14 listed regulatory tools. - Future planned frameworks are expected by both FSB and non-FSB members to expand applicable regulatory toolkits. - Regulatory requirements are generally less likely to apply to stablecoins than to broader crypto-asset activities: except for AML/CFT, the other 13 listed requirements are applicable in less than 40% of FSB members and less than 20% of non-FSB members for stablecoins. - In 8 of the 14 listed requirements, applicability to stablecoins is less than 10% among non-FSB members. ### Risks jurisdictions prioritize - Risks assessed as “very important”: - Financial integrity risks (notably money laundering and terrorism financing): 80% of FSB members and 77% of non-FSB members. - Consumer protection: cited among the most important risks. - Market integrity: cited among the most important risks. - Financial stability risk: 48% of FSB members and 40% of non-FSB members. - EMDEs and non-FSB members additionally emphasise infrastructure risks, including operational, technology, and cyber risk. ### Implementation challenges identified - Top challenges for FSB members: - Cross-border coordination and cooperation: 80% identified as a ‘very important’ challenge. - Off-shore service providers: 75%. - Regulatory perimeter: 60%. - Top challenges for non-FSB members: - Consumer education: 64%. - Data gaps: 60%. - Capacity/expertise: 56%. - Interpretation: - Non-FSB members (many of which are EMDEs) face capacity constraints and difficulties initiating regulation due to lack of adequate and reliable data. --- _Source: https://www.imf.org/-/media/files/research/imf-and-g20/2024/imf-fsb-g20-crypto-asset-policy-implementation-roadmap.pdf_