Crypto policies, AI remain key topics of focus for G20 2024 agenda in Brazil: FSB

Brazil took over the G20 presidency from India in December 2023 and will continue to chair the organization until November this year. Crypto-related policy formulation, asset tokenization and the responsible handling of artificial intelligence (AI) will continue to remain key focal points for discussions this year. The details were revealed by the global fintech watchdog, the Financial Stability Board (FSB). The FSB previously contributed to the research work on crypto policy that India launched during its G20 presidency last year.

Claes Knott, the chairman of the FSB, wrote a letter to the G20 group outlining the key issues to be addressed in 2024. This letter was circulated to G20 countries ahead of the group’s meetings scheduled for 28 and February 29 in Sao Paulo, Brazil.

“The FSB will continue to coordinate international work through the G20 Roadmap on Crypto Assets. To address the growing risks to financial stability from cyber incidents, the FSB is also designing an Incident Report Exchange (FIRE) format for public consultation.” letter said. Subsequently, the topic of improving the ways of processing cross-border payments is also among the important ones.

The letter outlines certain challenges facing the global fintech sector that need priority attention. The letter sent by the FSB to G20 countries said that “debt servicing challenges may increase and exposures to sectors facing existing headwinds, such as commercial real estate, should be carefully monitored.” Sudden changes in market pricing can expose vulnerabilities in the financial system, including those related to leverage and liquidity mismatches in NBFIs.”

In 2023, the FSB joined India’s vision of creating a global policy framework to oversee the crypto sector. After receiving feedback from stakeholders and the public, the organization outlined some guidelines for crypto regulations that include oversight and control of global stablecoin agreements (GSCs) and support for responsible innovation, while leaving jurisdictions free to implement domestic approaches.

According to the FSB, the vulnerabilities that pervade the crypto sector resemble those prevalent in traditional financial practices involving leverage, liquidity mismatches, both technological and operational.

Despite finalizing a crypto roadmap for G20 countries to adopt for crypto monitoring, the FSB strongly believes that more clarity needs to be brought into the laws to keep sensitive sectors like crypto and AI safe for use.

“Further work may be needed to improve cross-border cooperation and information sharing and to address identified information gaps,” the organization said in November 2023.