G20 Watchdog Sounds Alarm: Privacy Rules Are Handcuffing Global Crypto Oversight

The G20’s top financial watchdog has warned that strict privacy and data protection laws are hindering global regulators from effectively overseeing the fast-growing cryptocurrency ￰2￱ a detailed peer review report released on Thursday, the Financial Stability Board (FSB), a global authority funded by the Bank for International Settlements (BIS), said inconsistencies in national crypto frameworks are creating major barriers to cross-border supervision and systemic risk monitoring. Crypto-asset markets are inherently global, but several shortcomings currently prevent an effective and comprehensive oversight by authorities and may delay a coordinated response to potential systemic ￰3￱ out more: ￰0￱ #crypto #stablecoins — The FSB (@FinStbBoard) October 17, 2025 The FSB’s 107-page review outlined persistent gaps in how countries regulate digital assets such as Bitcoin and ￰4￱ noted that divided supervisory responsibilities, fragmented approaches, and especially data privacy laws are complicating information-sharing among regulators worldwide.

“Secrecy or data privacy laws may pose significant barriers to cooperation,” the FSB wrote, adding that in many jurisdictions, confidentiality rules prevent companies from sharing transaction or risk-related data with foreign regulators.) November 19, 2024 For the crypto community, privacy represents a fundamental right and a necessary layer of security in digital ￰5￱ advocates note that transparency on public blockchains can expose people and businesses to competitive and security ￰6￱ wallet data can reveal salaries, trade volumes, and strategic holdings, information that, in traditional finance, remains strictly ￰7￱ say that without privacy, enterprises and institutions remain hesitant to adopt blockchain for mainstream financial operations .

Experts, Especially Ethereum, Say Lack of Privacy is Crypto’s Biggest Weakness Recent initiatives within the Ethereum ecosystem show the industry’s efforts to address these privacy ￰8￱ Ethereum Foundation recently launched a 47-member Privacy Cluster coordinated by Blockscout founder Igor ￰9￱ group seeks to develop privacy-preserving technologies such as private reads and writes, selective disclosure for digital identities, and a new privacy-focused wallet called ￰10￱ foundation warned earlier this year that without robust privacy safeguards, Ethereum could risk becoming “the backbone of global surveillance rather than global freedom.” Ethereum Foundation's @PrivacyEthereum rebrands as PSE with a roadmap making privacy the default across the technical stack to prevent surveillance risks. #Ethereum #Privacy ￰1￱ — ￰11￱ (@cryptonews) September 14, 2025 Ethereum co-founder Vitalik Buterin has also been vocal on the issue , describing privacy as “essential to decentralization.” In his essay “Why I Support Privacy,” Buterin argued that information asymmetry, when power is concentrated among those who control data, undermines democratic and financial ￰12￱ debate over crypto privacy has also drawn attention from regulators in the EU, U.

S., and U. K., where laws governing Know Your Customer (KYC) procedures and the Financial Action Task Force’s (FATF) Travel Rule are ￰13￱ of privacy tools such as mixers and zero-knowledge proof systems have faced increasing scrutiny , with some jurisdictions treating privacy technologies as potential tools for criminal ￰14￱ regulatory pressure, many within the crypto industry maintain that privacy and compliance are not mutually ￰15￱ models such as smart contract privacy allow transactions to remain verifiable without exposing sensitive data, a balance that could satisfy both regulators and ￰16￱ veteran Petro Golovko, trust protector at British Gold Trust, told Cryptonews that the lack of privacy is “crypto’s biggest undoing.” He argued that no monetary system can function if “every transaction is permanently public,” saying that without privacy, crypto “will never scale beyond a niche.” The FSB’s report concludes that addressing privacy barriers will be key to supporting effective cross-border cooperation.