Quick Breakdown
- FSB identifies data privacy as a key obstacle to global crypto oversight.
- Privacy laws restrict data sharing among regulators, report says.
- Watchdog urges stronger cooperation to address regulatory fragmentation.
The Financial Stability Board (FSB), the G20’s risk watchdog, has identified data privacy as one of the biggest legal obstacles to effective cross-border regulation of cryptocurrencies, including Bitcoin and stablecoins. The warning comes as global regulators struggle to align crypto oversight frameworks amid concerns over financial stability and market integrity.
Privacy laws hindering cross-border supervision
In a 107-page peer review report published Thursday, the FSB highlighted persistent inconsistencies in how countries approach crypto regulation — a challenge that has created room for regulatory arbitrage, fragmented markets, and significant data gaps. The report noted that varying national privacy laws have made it difficult for authorities to share information necessary to identify systemic risks.
“Secrecy or data privacy laws may pose significant barriers to cooperation,” the FSB said, pointing out that in some jurisdictions, financial institutions and crypto companies are legally restricted from sharing data with foreign regulators. This limitation, the board warned, weakens efforts to monitor global crypto flows and undermines coordinated responses to emerging risks.
🚨 G20 warns of “significant gaps” in crypto regulation.
The Financial Stability Board (FSB) says global oversight of digital assets remains fragmented, with each country applying different rules.
This inconsistency complicates AML efforts and cross-border monitoring.… pic.twitter.com/a0FXOQeOLe— Lynneri (@lynneri_) October 16, 2025
Regulators urged to strengthen cooperation frameworks
Beyond privacy restrictions, the report cited divided supervisory responsibilities, inconsistent enforcement practices, and hesitation among market participants to share sensitive data due to fears of confidentiality breaches or a lack of reciprocal transparency. These factors, the FSB added, have delayed cooperation requests and, in some cases, discouraged participation in international monitoring initiatives altogether.
The FSB called for governments to address these gaps urgently, arguing that improved data-sharing mechanisms and harmonized regulatory standards are essential for managing the fast-evolving crypto landscape. While the watchdog has yet to propose concrete solutions, it emphasized that tackling privacy-related barriers would help foster more effective global oversight of digital asset markets.
Meanwhile, in Africa, the Kenyan government has suspended the Worldcoin project over concerns of unauthorized biometric data collection and potential misuse of citizens’ personal information — further underscoring the growing tension between innovation and data privacy in global crypto regulation.
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