Cryptos Don't Pose Risks to Global Financial Stability: FSB's Carney Tells G20
The Financial Stability Board (FSB), an international body that monitors the global financial system to promote stability and coordinates financial regulation for G20 nations has dismissed calls from some G20 members to control cryptocurrencies like bitcoin.
In a letter [PPDF] delivered to G20 finance ministers and central bank governors on the eve of the year's G20 summit in Argentina, FSB chairman Mark Carney has stressed that cryptocurrencies do not represent a threat to the international financial system, following a review by the authority.
Carney, who also functions as Bank of England governor, revealed the FSB had undertaken a review of financial stability risks posed by cryptocurrencies' «rapid growth» in response to concerns by G20 members.
He went on to state:
«The FSB's initial assessment is that crypto-assets do not pose risks to international financial stability at this time.»
«That is in part because they are small relative to the fiscal system. Even at their recent summit, their combined global market value was less than 1 percent of global GDP,» he added. «In comparison, just prior to the worldwide financial crisis (in 2008), the notional value of credit default swaps has been 100% of global GDP.»
The FSB review determined that, for the time being, the relatively small use of cryptocurrencies as fiat money substitutes and the «very limited use for the real economy and financial transactions» means limited links to the broader financial system for cryptocurrencies.
The G20, an international forum of governments and central bank governors in the world's top 20 economies. Japan, in particular, is planning on pushing its G20 counterparts to introduce measures to prevent the abuse of cryptocurrencies in money laundering, as mentioned previously.
Despite pointing to buyer and consumer concerns in cryptocurrencies and their use, or abuse, in illegal actions, Carney reminded G20 finance ministers and central bank chiefs:
«The technology underlying them have the potential to improve the efficiency and inclusiveness of the financial system and the economy.»
Government officials of G20 member nations are expected to hold meetings that will include talks surrounding the regulation of cryptocurrencies on Monday and Tuesday.