In a press release issued on July 16 via its website, the Financial Stability Board (FSB) announced that cryptocurrencies do not pose a threat to the global financial system.
FSB Partners with CPMI to Monitor Cryptocurrencies
The purpose of the announcement was to apprise the G20 Finance Ministers and Central Bank Governors of the FSB’s activities concerning the emerging cryptocurrency industry. According to the press release, the FSB is working in tandem with the Committee on Payments and Market Infrastructures (CPMI).
Both the FSB and the CPMI have collaborated to develop a framework for its oversight activities on the virtual currency market. The two bodies also aim to monitor the impact of virtual currencies on the global financial industry.
Cryptocurrency Poses No Threat to Global Finance
The FSB also maintains that virtual currencies posed no immediate danger to the stability of global finance. In fact, chairman Mark Carney made the same remark in the lead up to the March 2018 G20 summit in Buenos Aires, Argentina. However, the FSB believes that robust monitoring of the market is required, in light of the fast-paced nature at which the technology is developing.
Transmission channels within the market are of primary importance to the Board. To this end, the FSB has set about creating a monitoring framework that will enable it to evaluate the size and growth of the cryptocurrency market. By so doing, the Board hopes to be able to ascertain the wealth effects of the emerging virtual currency asset class.
Cryptocurrency Monitoring on an International Scale
The FSB-led effort is the latest in an emerging trend of cryptocurrency regulations on an international scale. Since the market boom of 2017, governments around the world seem to have awoken from their ambivalent slumber concerning the virtual currency industry.
The EU has been at the forefront of efforts to regularize cryptocurrency laws across its member states. Recently, the United States Internal Revenue Service (IRS) announced the creation of an international coalition to combat virtual currency tax crimes.
Do you agree with the FSB’s stance that cryptocurrencies pose no threat to global finance? Keep the conversation going in the comment section below.
Images courtesy of fsb.org, Shutterstock