FSB: Crypto Assets ‘Not A Threat’ To Financial Stability

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The Financial Stability Board has said that crypto assets do not pose a threat to the stability of mainstream global financial systems, as per a report published by the body this week.

In its report “Crypto-asset markets: Potential channels for future financial stability implications,” the board said that there was no direct threat from cryptocurrencies to wider financial markets.

Their findings come after a period of heightening debate around crypto assets in the mainstream financial world, as regulators, banks and other institutional investors begin to warm to the crypto space.

With some regulators still on the fence about the technology, citing concerns over its potential impact on the current international financial order, the report findings can be seen as a vote of confidence in cryptocurrency as an enduring technology for the future.

According to a press release published by the board, crypto assets are not at present a risk to global financial stability.

“Based on the available information, crypto-assets do not pose a material risk to global financial stability at this time. However, vigilant monitoring is needed in light of the speed of market developments. Should the use of crypto-assets continue to evolve, it could have implications for financial stability in the future.”

The Financial Stability Board is an international organization backed by the Bank of International Settlements. The board is tasked with monitoring and reporting on perceived risks to the global financial system.

Its published findings are significant, and will influence the debate around how cryptocurrencies and crypto assets should be regulated.

It comes at a time of increasing efforts among national regulators to tighten laws and regulations that affect the emerging crypto assets sector.

While the report found no significant threat to date, it did urge closer monitoring of crypto assets in future, a task it acknowledged would be difficult given the fast pace of change in the sector.

However, crypto backers will hope that today’s report will help allay remaining concerns around crypto assets, particularly among banks and institutional investors, which remain essential allies as crypto assets continue to increase in relevance to the mainstream financial world.