FSB: Crypto Poses No “Material Risk” to Stability of Global Finance

 

 

 

A new report from the Financial Stability Board (FSB) suggests that the financial watchdog doesn’t believe that cryptocurrencies “pose a material risk to global financial stability at this time.” That assessment conforms to a similar claim made by FSB head Mark Carney earlier in 2018 when he told G20 central bankers and finance ministers that Bitcoin was not a “systemic risk” to that financial system.

The FSB also recently announced that the Basel Committee on Banking Supervision will be monitoring member banks’ cryptocurrency exposure and crypto assets. That monitoring will involve the collection of data that will be analyzed to better understand digital currency’s potential impact on the financial system and any risks that may arise over time.

The monitoring is part of the FSB’s new framework for responding to the emerging technology. The FSB is tasked with coordinating global financial regulations among the Group of 20 Economies, or G20. The framework is designed to help the FSB better evaluate crypto asset risks and detect any emerging threats to the broader financial system before they become major concerns. In a statement on Monday, the FSB noted:

“The use of leverage, and financial institution exposures to crypto-asset markets are important metrics of transmission of crypto-asset risks to the broader financial system.”

According to Reuters, the new framework was developed in response to a compromise reached by G20 members in March. The FSB’s monitoring will also focus on “trading volumes, pricing, clearing and margining for derivatives linked to crypto assets, such as the bitcoin futures launched by CME Group (CME.O) last December.”

 

Author: Ken Chase

Freelance writer whose interests include topics ranging from technology and finance to politics, fitness, and all things canine. Aspiring polymath, semi-professional skeptic, and passionate advocate for the judicious use of the Oxford comma.

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