Parallel to this, the FSB has started to examine, together with the relevant standard-setting bodies, regulatory and supervisory issues and approaches to address risks stemming from the so-called “unbacked” crypto-assets. And we will analyse the financial stability implications of Decentralized Finance, in order to understand the need for policy action in that area.
Another feature of digital innovation is the ever-greater use by financial institutions of outsourcing to third-party service providers. While outsourcing may have provided additional resilience during the pandemic, it has also reinforced the importance of effective policies for the oversight of financial institutions’ reliance on critical service providers. To this can be added the greater exposure to cyber risk.