New FSB and IOSCO assessments show accelerating global crypto regulation, yet fragmented enforcement and India’s missing framework deepen concerns over risk, stability, and cross-border vulnerabilities.
22 November 2025
Global crypto regulation has entered a decisive phase. In recent weeks, landmark assessments from the Financial Stability Board (FSB) and the International Organization of Securities Commissions (IOSCO) have laid bare a familiar reality: while regulatory initiatives are picking up pace worldwide, the patchwork approach and inconsistent enforcement continue to leave critical gaps. Standing out most visibly is India — a country with one of the world’s largest crypto-user bases but still no comprehensive regulatory framework.
The FSB’s October peer review highlights just how uneven the landscape has become. Out of 29 surveyed jurisdictions, only 11 have fully developed crypto-asset frameworks. Stablecoins fare even worse: only five jurisdictions have complete rules in place despite the market nearing $290 billion and expanding at an extraordinary 75% annual rate. India is grouped with five other jurisdictions — China, Kazakhstan, Lebanon, Mexico, and Saudi Arabia — that have not drafted or finalized any crypto regulation. IOSCO’s review omitted India entirely, a telling exclusion for a market with over 100 million retail users.
In countries where frameworks are in force, enforcement has moved into a more active phase. Regulators in Australia, Bermuda, Hong Kong, Singapore, and Canada have begun taking decisive actions — from penalizing major exchanges like Binance, XT.com, and CoinEx to cracking down on unauthorized crypto ATMs. India, meanwhile, remains limited to anti–money laundering oversight through the Prevention of Money Laundering Act, leaving crucial areas such as licensing, custody norms, investor safeguards, and market surveillance unresolved.
This regulatory vacuum is accelerating a well-known phenomenon: regulatory arbitrage. As rules tighten in some jurisdictions, companies relocate to those with fewer obligations. India is already seeing offshore exchanges servicing domestic users while operating entirely from abroad, diluting supervisory control and heightening systemic risks.
Both global bodies underline a shared vulnerability — the cross-border structure of stablecoin operations. When key functions such as issuance, reserve management, and distribution span jurisdictions with mismatched standards, market stress can trigger runs toward the weakest link. IOSCO further warns that stablecoin issuers’ growing reliance on short-term Treasuries and money-market funds is tightening the connection between crypto markets and traditional finance, amplifying potential spillovers.
Cross-border cooperation, a pillar of modern financial supervision, is also failing to keep up. Although all major jurisdictions have signed the IOSCO Multilateral Memorandum of Understanding, actual information exchange remains minimal. The FSB notes that the absence of standardized data on leverage, liquidity, and market interlinkages prevents regulators from forming a unified approach to oversight.
The FSB’s regulatory staging underscores the widening gap. Stage-5 jurisdictions — including the EU, Japan, Singapore, Indonesia, Thailand, Nigeria, Türkiye, Bermuda, and the Bahamas — have built and implemented frameworks calibrated for financial stability. India remains in Stage 1: no legislation proposed, no regulatory blueprint, and no timeline.
Despite the global momentum, the overarching message remains the same: regulatory clarity is not just about compliance — it is fundamental to building safe, credible, and resilient crypto markets. Clear rules keep activity within oversight; unclear or absent rules drive it offshore, creating blind spots and compounding risks.
For India, the implications are clear. A phased but clear regulatory pathway would not only protect consumers and reduce systemic risks but also position the country as a trusted digital-asset hub. The FSB and IOSCO findings reinforce that comprehensive, internationally aligned regulation is no longer optional — it is essential for safeguarding financial stability and enabling responsible innovation.
