Regulation of Fintech is coming closer
In February this year, Financial Stability Board (FSB) announced in a letter to G20 central bankers and finance ministers that FSB would start to assess the possible impact of Fintech on the stability of the financial sector.
In late March, global regulators moved even closer to regulating Fintech when FSB agreed on a framework for categorizing different types of Fintech, such as Bitcoin, and assessing their potential risk. The purpose is to ensure that the rapid growth of the Fintech industry does not pose any risk to the financial system.
Perhaps a paradigm shift is on its way, as more and more policy makers, regulators and finance executives are starting to talk about taking measures relating to Fintech. One recent example is from April 19, when senior finance executives, start-ups and policy-makers agreed on a joint articulation, prepared by the World Economic Forum, proposing actions to minimize risk and exploit opportunities relating to Fintech.
The recommendations include debating the ethical use of data, set up a public-private forum on technological transformation, proactively set industry standards on good conduct and to monitor Fintech innovation to ensure that national supervisors are equipped to mitigate risk related to Fintech.