# FSB and IOSCO Find Global Crypto Regulation Implementation Fragmented ∞ Regulation

**Published:** 2025-11-01
**Categories:** Regulation

---

![A central, intricate three-dimensional abstract structure composed of translucent blue, angular block-like elements and two smooth white spheres is interwoven with white and black flexible lines against a soft gray-blue background. The blue elements, some appearing fragmented, form a dense core, while the lines crisscross and connect various components of the structure](https://incrypthos.com/wp-content/uploads/2025/09/Decentralized-Ledger-Architecture-Dynamic-Interoperability-Nodes-Transaction-Flow.jpeg)

![A close-up view reveals a transparent, fluidic-like structure encasing precision-engineered blue and metallic components. The composition features intricate pathways and interconnected modules, suggesting a sophisticated internal mechanism](https://incrypthos.com/wp-content/uploads/2025/09/decentralized-ledger-infrastructure-cryptographic-primitive-hardware-module.jpeg)

## Briefing

The [Financial Stability](https://incrypthos.com/news/financial-stability/) Board (FSB) and IOSCO published a thematic peer review confirming significant global gaps in implementing the 2023 crypto-asset frameworks, immediately signaling a mandate for accelerated domestic action. The primary consequence is that Crypto-Asset Service Providers (CASPs) and Global Stablecoin Arrangement (GSC) issuers face intensified scrutiny and must prioritize the systemic integration of risk controls, particularly around liquidity and capital requirements. The review found that alignment with recommendations remains limited , especially regarding GSC recovery and resolution planning, which demands urgent jurisdictional focus.

![The image displays a dense arrangement of metallic grey and vibrant blue modular blocks, meticulously connected by a web of grey and blue cables. These components form a sophisticated, abstract representation of a high-performance computational system](https://incrypthos.com/wp-content/uploads/2025/09/blockchain-infrastructure-interoperability-protocols-decentralized-network-nodes.jpeg)

## Context

Prior to this review, the global regulatory landscape operated under the high-level principle of “same activity, same risk, same regulation” established by the 2023 FSB/IOSCO recommendations. This framework, while conceptually clear, lacked a uniform operational compliance standard across jurisdictions, leading to widespread legal ambiguity. The prevailing challenge was the inconsistent domestic classification of crypto-asset activities and a fragmented application of requirements for cross-border entities, creating opportunities for [regulatory arbitrage](https://incrypthos.com/news/regulatory-arbitrage/) and uneven risk mitigation.

![The image displays a complex, futuristic apparatus featuring transparent blue and metallic silver components. White, cloud-like vapor and a spherical moon-like object are integrated within the intricate structure, alongside crystalline blue elements](https://incrypthos.com/wp-content/uploads/2025/09/advanced-defi-protocol-engine-algorithmic-stablecoin-liquidity-management.jpeg)

## Analysis

This review directly impacts the architectural design of compliance frameworks for CASPs and GSC issuers by demanding concrete operational updates. Firms must immediately audit their existing risk controls against the new recommendations, specifically upgrading liquidity risk management and capital buffer models to meet GSC standards. The push for comprehensive supervisory reporting means regulated entities must invest in new data infrastructure to monitor and report [financial stability risks](https://incrypthos.com/news/financial-stability-risks/), altering the chain of effect from a principle-based compliance approach to a data-driven, auditable system. Failure to address these gaps will increase enforcement risk and potentially restrict cross-border market access as regulators prioritize harmonization.

![White and dark gray modular structures converge, emitting intense blue light and scattering crystalline fragments, creating a dynamic visual representation of digital processes. This dynamic visualization depicts intricate operations within a decentralized network, emphasizing the flow and transformation of data](https://incrypthos.com/wp-content/uploads/2025/09/distributed-ledger-network-interoperability-protocol-computational-trust-dynamics.jpeg)

## Parameters

- **Framework Year** ∞ 2023; The year the initial FSB/IOSCO [Global Regulatory Framework](https://incrypthos.com/news/global-regulatory-framework/) was finalized.

- **Jurisdictional Alignment** ∞ Limited; The FSB’s assessment of alignment with recommendations, particularly for GSCs.

- **Targeted Entities** ∞ CASPs and GSCs; The two primary categories of [digital asset](https://incrypthos.com/news/digital-asset/) activity assessed by the review.

- **Key Risk Gap** ∞ Recovery and Resolution; A critical requirement for Global [Stablecoin Arrangements](https://incrypthos.com/news/stablecoin-arrangements/) where implementation progress is slowest.

![A translucent, frosted component with an intricate blue internal structure is prominently displayed on a white, grid-patterned surface. The object's unique form factor and textured exterior are clearly visible, resting against the regular pattern of the underlying grid, which features evenly spaced rectangular apertures](https://incrypthos.com/wp-content/uploads/2025/09/advanced-cryptographic-hardware-module-for-decentralized-network-infrastructure.jpeg)

## Outlook

The publication of this peer review initiates a critical new phase of domestic rulemaking as G20 jurisdictions must now respond to the eight recommendations to achieve full implementation. This global pressure for harmonization will likely accelerate the finalization of GSC-specific legislation, setting a precedent for a more robust, bank-like regulatory standard for stablecoins worldwide. The focus on supervisory reporting signals a long-term shift toward mandated data sharing, which will fundamentally alter the operational burden for all large-scale digital asset firms and influence the structure of future [cross-border cooperation](https://incrypthos.com/news/cross-border-cooperation/) agreements.

![A dynamic arrangement of interlocking white torus shapes and spherical nodes, connected by fine metallic filaments, is embedded within a fragmented, crystalline matrix of deep blues and clear ice. This abstract composition visually articulates the fundamental principles of blockchain technology and cryptocurrency networks](https://incrypthos.com/wp-content/uploads/2025/09/Blockchain-Interconnectivity-Decentralized-Ledger-Node-Synchronization-Protocols.jpeg)

## Verdict

**The FSB and IOSCO review unequivocally establishes that global regulatory fragmentation is the current [systemic risk](https://incrypthos.com/news/systemic-risk/), mandating an immediate, accelerated upgrade of all stablecoin and CASP compliance architecture.**

Global regulatory framework, Financial stability risks, Crypto asset service providers, Stablecoin arrangements, Regulatory inconsistency, Cross-border cooperation, Supervisory reporting, Liquidity risk management, Capital buffer requirements, Recovery and resolution, Market integrity, Investor protection, Systemic risk monitoring, Digital asset ecosystem, Regulatory arbitrage, International standards, Jurisdiction implementation Signal Acquired from ∞ <a href="https://www.jdsupra.com/legalnews/fsb-and-iosco-publish-reports-on-6423764/?utm_source=incrypthos.com&utm_medium=referral&utm_campaign=noo-engine.com" target="_blank" rel="nofollow">jdsupra.com</a> 

## Micro Crypto News Feeds

<a href="https://incrypthos.com/news/financial-stability/" class="glossary-item-box">

## financial stability 

Definition ∞ Financial stability refers to the condition where the financial system can effectively intermediate funds and manage risks without significant disruptions. </a><a href="https://incrypthos.com/news/regulatory-arbitrage/" class="glossary-item-box">

## regulatory arbitrage 

Definition ∞ Regulatory Arbitrage describes the practice of exploiting differences in regulations between jurisdictions or market segments to gain a competitive advantage or reduce compliance costs. </a><a href="https://incrypthos.com/news/financial-stability-risks/" class="glossary-item-box">

## financial stability risks 

Definition ∞ Financial stability risks refer to potential threats that could disrupt the proper functioning of the financial system, leading to widespread economic harm. </a><a href="https://incrypthos.com/news/global-regulatory-framework/" class="glossary-item-box">

## global regulatory framework 

Definition ∞ A global regulatory framework refers to a unified set of rules and standards for governing an activity across multiple jurisdictions worldwide. </a><a href="https://incrypthos.com/news/digital-asset/" class="glossary-item-box">

## digital asset 

Definition ∞ A digital asset is a digital representation of value that can be owned, transferred, and traded. </a><a href="https://incrypthos.com/news/stablecoin-arrangements/" class="glossary-item-box">

## stablecoin arrangements 

Definition ∞ Stablecoin arrangements refer to the various structures and mechanisms used to maintain a stable value for a digital asset, typically pegged to a fiat currency like the US dollar. </a><a href="https://incrypthos.com/news/cross-border-cooperation/" class="glossary-item-box">

## cross-border cooperation 

Definition ∞ Cross-border cooperation refers to the collaborative efforts between entities or jurisdictions situated in different countries. </a><a href="https://incrypthos.com/news/systemic-risk/" class="glossary-item-box">

## systemic risk 

Definition ∞ Systemic risk refers to the danger that the failure of one component within a financial system could trigger a cascade of failures across the entire network. </a>

**Tags:** [Financial Stability Risks](https://incrypthos.com/news/financial-stability-risks/), [Market Integrity](https://incrypthos.com/news/market-integrity/), [International Standards](https://incrypthos.com/news/international-standards/), [Global Regulatory Framework](https://incrypthos.com/news/global-regulatory-framework/), [Digital Asset Ecosystem](https://incrypthos.com/news/digital-asset-ecosystem/), [Regulatory Arbitrage](https://incrypthos.com/news/regulatory-arbitrage/)	

## Discover More

- 
### [U.S. Congress Enacts GENIUS Act Establishing Federal Stablecoin Regulatory Framework](https://incrypthos.com/regulation/u-s-congress-enacts-genius-act-establishing-federal-stablecoin-regulatory-framework/)
![A textured blue-to-white gradient form dominates, embodying a complex distributed ledger technology DLT. A smooth, pearlescent white object flows around it, signifying dynamic smart contract execution and liquidity provision. A glossy, dark blue abstract element suggests robust institutional adoption frameworks. Two distinct spheres, translucent white and solid dark blue, symbolize diverse tokenomics and digital asset management within the ecosystem.](https://incrypthos.com/wp-content/uploads/2025/09/decentralized-ledger-data-structures-tokenomics-institutional-liquidity.jpeg)

The GENIUS Act mandates 1:1 reserve backing and federal oversight, fundamentally reclassifying payment stablecoins as regulated financial instruments.

- 
### [Avantis Launches Derivatives Platform and AVNT Token on Base](https://incrypthos.com/web3/avantis-launches-derivatives-platform-and-avnt-token-on-base/)
![A close-up view presents interconnected white modular blocks, their transparent blue internal structures emitting light, signifying secure data transfer within a blockchain network. Each block functions as a validated node, establishing cryptographic linkage through its modular design. This illustrates a robust distributed ledger technology, emphasizing transaction throughput and immutability. The visible interconnections symbolize a peer-to-peer network facilitating digital asset movement and smart contract execution across the decentralized finance ecosystem.](https://incrypthos.com/wp-content/uploads/2025/09/blockchain-network-nodes-cryptographic-linkage-secure-data-transfer-mechanism.jpeg)

Avantis introduces a universal leverage layer on Base, enabling high-leverage perpetual futures across diverse assets, significantly advancing capital efficiency in decentralized derivatives.

- 
### [FCA Proposes Tailored Regulatory Framework for UK Crypto Firms](https://incrypthos.com/regulation/fca-proposes-tailored-regulatory-framework-for-uk-crypto-firms/)
![A sophisticated, modular Web3 protocol core is depicted, featuring a pristine white outer casing enveloping intricate blue and metallic internal decentralized ledger technology components. Visible smart contract execution units and network nodes suggest complex algorithmic governance processes. The central, multi-pronged mechanism could represent validator operations or oracle data feeds, emphasizing precise, automated functionality within a trustless system. Its clean design and interconnected elements symbolize robust blockchain interoperability and scalable digital asset management infrastructure.](https://incrypthos.com/wp-content/uploads/2025/09/blockchain-consensus-mechanism-algorithmic-governance-infrastructure.jpeg)

The FCA's CP25/25 initiates a bespoke UK cryptoasset regime, balancing innovation with enhanced operational resilience and crime prevention.

- 
### [France Challenges MiCA Passporting, Demands Stricter EU Crypto Oversight](https://incrypthos.com/regulation/france-challenges-mica-passporting-demands-stricter-eu-crypto-oversight/)
![Interconnected transparent vessels display vibrant blue, textured digital assets, symbolizing liquidity pools within a DeFi ecosystem. Metallic interfaces, resembling oracle nodes or smart contract execution units, link these components via thin wires, representing data transmission channels or cross-chain interoperability. The intricate setup visualizes a complex protocol layer, where tokenomics govern asset flow and cryptographic security underpins the distributed ledger technology. This abstract representation highlights the foundational infrastructure of Web3, emphasizing decentralized governance and scalable solutions.](https://incrypthos.com/wp-content/uploads/2025/09/blockchain-protocol-interoperability-liquid-staking-mechanism-visualized.jpeg)

This action introduces critical uncertainty for EU-licensed crypto firms, necessitating a reassessment of cross-border operational compliance strategies.

- 
### [SEC and CFTC Clarify Spot Crypto Trading on Regulated Exchanges](https://incrypthos.com/regulation/sec-and-cftc-clarify-spot-crypto-trading-on-regulated-exchanges/)
![A translucent, blue, organic-like membrane partially encases intricate dark blue and metallic mechanical components. This visual metaphor illustrates an advanced protocol layer facilitating smart contract execution. The visible gears and shafts represent the precise consensus mechanism and cryptographic primitives underpinning distributed ledger technology. Openings in the enveloping structure suggest DAO governance interfaces, showcasing a robust DeFi protocol stack within an adaptive framework. This highlights transparent operations and core operational mechanics.](https://incrypthos.com/wp-content/uploads/2025/09/Interoperable-Blockchain-Protocol-Layer-Encapsulating-Core-Cryptographic-Primitives.jpeg)

This joint interpretive statement provides critical clarity, enabling regulated exchanges to list spot crypto products and accelerating institutional market entry.

- 
### [Deutsche Börse Subsidiary Launches Institutional Off-Exchange Digital Asset Settlement](https://incrypthos.com/adoption/deutsche-borse-subsidiary-launches-institutional-off-exchange-digital-asset-settlement/)
![A close-up reveals an intricate, high-precision metallic and azure-blue component, possibly a core element of a validator node or a smart contract execution engine. White, frothy substance, indicative of protocol sanitization or a cleansing process, adheres to its complex gears and interfaces. This visual metaphor highlights the critical ongoing data integrity checks and smart contract auditing essential for maintaining decentralized ledger technology DLT hygiene. The meticulous process ensures robust network resilience and optimal performance of cryptographic primitives within a blockchain ecosystem.](https://incrypthos.com/wp-content/uploads/2025/09/Consensus-Mechanism-Refinement-for-Enhanced-Blockchain-Protocol-Resilience.jpeg)

Crypto Finance's AnchorNote optimizes institutional digital asset trading by enabling secure, capital-efficient off-exchange settlement, mitigating counterparty risk.

- 
### [FSB and IOSCO Report Finds Global Crypto Regulation Implementation Fragmented](https://incrypthos.com/regulation/fsb-and-iosco-report-finds-global-crypto-regulation-implementation-fragmented/)
![A sophisticated, abstract machine composed of white, modular segments on the left and a darker, blue-lit internal core on the right. A dynamic burst of white, granular material erupts from the central nexus, suggesting intense activity. Transparent conduits traverse the scene, implying data pathways. This represents a high-performance distributed ledger technology DLT system. The modular components signify robust blockchain architecture and network nodes, while the blue-illuminated core illustrates intensive transaction processing and data hashing. The central eruption embodies a smart contract execution event or token emission, demonstrating rapid cryptographic proof generation. This dynamic visual encapsulates the intricate consensus mechanism powering decentralized finance DeFi operations.](https://incrypthos.com/wp-content/uploads/2025/09/distributed-network-node-performing-high-frequency-data-hashing.jpeg)

Global regulators cite significant gaps in crypto framework implementation, demanding immediate, consistent national-level GSC and CASP rule finalization.

- 
### [SEC Rescinds SAB 121, Bolstering Institutional Digital Asset Custody](https://incrypthos.com/regulation/sec-rescinds-sab-121-bolstering-institutional-digital-asset-custody/)
![A close-up view reveals interconnected, futuristic white modular units alongside transparent, glowing blue crystalline structures, encased in frost. These components suggest a sophisticated blockchain architecture, possibly representing validator nodes or secure enclaves within a decentralized ledger technology DLT system. The frost emphasizes advanced thermal management for optimal performance, critical for high-throughput cryptographic hashing or zero-knowledge proof ZKP computations. This setup illustrates robust network security infrastructure, potentially for cold storage solutions or quantum-resistant cryptography applications, ensuring data integrity across distributed systems.](https://incrypthos.com/wp-content/uploads/2025/09/frost-covered-modular-units-for-advanced-cryptographic-processing-nodes.jpeg)

The SEC's reversal on SAB 121 redefines custodial accounting, directly enabling regulated financial institutions to scale digital asset services.

- 
### [SEC Chair Announces Innovation Exemption Framework to Modernize Digital Asset Rules](https://incrypthos.com/regulation/sec-chair-announces-innovation-exemption-framework-to-modernize-digital-asset-rules/)
![A complex, multi-faceted cube composed of luminous blue and metallic silver blocks. The blue elements suggest interconnected data streams or energy flow, representing distributed ledger technology DLT. The metallic silver blocks provide structural integrity, symbolizing immutable ledger components and cryptographic hash functions. This abstract visualization highlights the intricate blockchain architecture of a decentralized network, emphasizing the interconnectedness of network nodes and potential for interoperability protocols within a Web3 infrastructure.](https://incrypthos.com/wp-content/uploads/2025/09/decentralized-ledger-architecture-illustrating-blockchain-interoperability-nodes.jpeg)

The SEC's pivot from enforcement to an innovation exemption fundamentally alters the U.S. market entry calculus for token issuers.

**Tags:** [Capital Buffer Requirements](https://incrypthos.com/news/capital-buffer-requirements/), [Cross-Border Cooperation](https://incrypthos.com/news/cross-border-cooperation/), [Crypto Asset Service Providers](https://incrypthos.com/news/crypto-asset-service-providers/), [Digital Asset Ecosystem](https://incrypthos.com/news/digital-asset-ecosystem/), [Financial Stability Risks](https://incrypthos.com/news/financial-stability-risks/), [Global Regulatory Framework](https://incrypthos.com/news/global-regulatory-framework/), [International Standards](https://incrypthos.com/news/international-standards/), [Investor Protection](https://incrypthos.com/news/investor-protection/), [Jurisdiction Implementation](https://incrypthos.com/news/jurisdiction-implementation/), [Liquidity Risk Management](https://incrypthos.com/news/liquidity-risk-management/), [Market Integrity](https://incrypthos.com/news/market-integrity/), [Recovery and Resolution](https://incrypthos.com/news/recovery-and-resolution/), [Regulatory Arbitrage](https://incrypthos.com/news/regulatory-arbitrage/), [Regulatory Inconsistency](https://incrypthos.com/news/regulatory-inconsistency/), [Stablecoin Arrangements](https://incrypthos.com/news/stablecoin-arrangements/), [Supervisory Reporting](https://incrypthos.com/news/supervisory-reporting/), [Systemic Risk Monitoring](https://incrypthos.com/news/systemic-risk-monitoring/)

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**Original URL:** https://incrypthos.com/regulation/fsb-and-iosco-find-global-crypto-regulation-implementation-fragmented/
