The Financial Stability Board (FSB) has developed a framework to monitor the financial stability implications of the developments in crypto-asset markets.

Nigel Green, CEO of deVere Group says that the report can be seen as a further recommendation of cryptocurrencies from FSB which has members from all the G20 major economies. “The survey’s findings demonstrate that high net worth individuals are increasingly unable to ignore the huge potential of cryptocurrencies,” “Cryptocurrencies are the future of money and they are already undeniably part of mainstream finance.” Green says.

In Q1 2018, the FSB discussed potential financial stability implications from crypto-assets. The FSB agreed that crypto-assets do not pose a material risk to global financial stability at this time, but supported vigilant monitoring in light of the speed of developments and data gaps. The objective of the framework is to identify any emerging financial stability concerns in a timely manner.

At their meeting in Buenos Aires back in March 2018 the G20 Ministers of Finance and Central Bank Governors called on the FSB to report by July 2018 on its work and that of other standards-setting bodies (SSBs) on crypto-assets.

The report provides an overview of the work by FSB and the Committee on Payments and Market Infrastructures (CPMI).

Executive summary from the report:

  • The FSB, in collaboration with CPMI, has developed a framework and identified metrics to monitor the financial stability implications of crypto-assets markets.
  • The CPMI has conducted significant work on applications of distributed ledger technology (DLT) and is conducting outreach, monitoring, and analysis of payment innovations.
  • The International Organization of Securities Commissions (IOSCO) has established an initial coin offering (ICO) Consultation Network to discuss experiences and concerns regarding ICOs. They are also developing a support framework to assist its members. Furthermore, they are discussing regulatory issues around crypto assets platforms.
  • The Basel Committee on Banking Supervision (BCBS) is quantifying the materiality of banks’ direct and indirect exposures to crypto-assets, clarifying the prudential treatment of such exposures, and monitoring developments related to crypto-assets and FinTech for banks and supervisors.

 

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