As the 2018 nears, the Financial Stability Board (FSB), in Argentina, which coordinates financial regulation for the G20 has given a clean bill to cryptocurrencies saying they have not done any danger to the global economy. The crypto has received this news with a more cautiously optimistic upturn.
In a letter to the G20 central bank governors and finance ministers, Mark Carney, the head of FSB who is also the governor of the Bank of England (BoE) said that the FSB carried out an extensive review of all the possible threats that the cryptocurrencies could have on the financial stability of the world. The FSB determined there was no risk at all. According to Carney noted that crypto-assets comprise a small portion of the entire financial market. As at last year when it was its peak, the cryptocurrency market comprised of just 1% of the global economy.
He noted that their connection to the rest of the financial system is limited given that they are small in size and cannot be substitute for the ordinary currency.
Carney has proposed a balanced approach in dealing with cryptocurrencies. He admitted that although there are some concerns raised about the safety and protection of investors plus their use in executing criminal activities like money laundering, the technology that comes with these digital currencies can be used to improve the efficiency and the inclusiveness of the economy and financial systems.
While commenting on the regulations that govern cryptocurrencies, Carney called for “international coordination”, owing to the nature of the cryptocurrency market in the global market. In his positions as the BoE governor, Carney has called for regulations to monitor the crypto market. He also announced that the financial watchdog vote in favor of reviewing the existing rules and regulations as opposed to developing new rules.
In the letter, the FSB admitted that the crypto market is growing and evolving and it may be forced to review its initial assessment as need may arise. In the meantime, Carney proposed an action point that will keep monitoring and identify any risks that may emerge.