Global finance watchdog tells G20 that crypto is not a risk right now | finder.com

Global finance watchdog tells G20 that crypto is not a risk right now

Peter Terlato 19 March 2018 NEWS

Initial assessments could change over time if crypto assets were “more widely used or interconnected”.

The Financial Stability Board (FSB), a global regulatory body that monitors financial susceptibility for the Group of 20 Economies (G20), has determined that the burgeoning cryptocurrency industry is not currently a liability to global financial stability. However, crypto assets do require further observation and investigation.

In a letter addressed to G20 finance ministers and central bank governors, FSB chairman and Bank of England governor Mark Carney responded to calls for tighter regulations surrounding emerging crypto enterprises.

“The FSB’s initial assessment is that crypto-assets do not pose risks to global financial stability at this time. This is in part because they are small relative to the financial system,” Carney wrote in the letter.

Carney explained that the value of crypto assets is relatively modest compared to the global financial system. For example, even during the December/January peak – when total market capitalization peaked at more than $800 billion – the combined market value was less than 1% of global Gross Domestic Product (GDP).

“Their small size, and the fact that they are not substitutes for currency and with very limited use for real economy and financial transactions, has meant the linkages to the rest of the financial system are limited,” he said.

Carney noted that the crypto market “continues to evolve rapidly” and that the FSB’s initial assessment could change over time if these assets were “more widely used or interconnected” with regulated financial systems.

“Crypto-assets raise a host of issues around consumer and investor protection,” he added. These include money laundering and terrorist financing activities. “At the same time, the technologies underlying them have the potential to improve the efficiency and inclusiveness of both the financial system and the economy.”

To support monitoring and timely identification of emerging financial stability risks, Carney revealed that the FSB plans to identify enhanced metrics and tools to fill any existing or future cryptocurrency data gaps.

The G20 Summit 2018, held in Buenos Aires March 19-20, will addresses issues such as international financial architecture, the global tax system, financial regulation, plus cryptocurrencies and supported technologies.

Following the Securities and Exchange Commission’s (SECs) statement on cryptocurrency platforms this month, Ripple chief executive Brad Garlinghouse says exchanges only have three options available to them.

You can learn all about different exchanges, understand exactly how to buy and sell cryptocurrencies, calculate your taxes, discover digital wallets to hold assets and explore a list of all the alternative coins on the market.

This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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