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Laxman Pai, Opalesque Asia: The Financial Stability Board (FSB) has said that crypto assets do not pose a threat to the stability of mainstream global financial systems.
In its report "Crypto-asset markets: Potential channels for future financial stability implications," FSB, which is hosted and funded by the Bank of International Settlements, said that there was no direct threat from cryptocurrencies to wider financial markets.
"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," said a press release from FSB.
The report viewed that cryptocurrencies are not an effective means of payment, store of value or unit of account.
FSB points to several potential future risks
The FSB warns of several potential risks posed by crypto assets such as bitcoin and ether, stemming from low liquidity, the use of leverage, market volatility and operational risks.
The report states that, should crypto-assets continue to gain in popularity, it might impact financial stability by having an effect on investor confidence.
FSB members have to date taken a wide variety of domestic supervisory, regulatory, and enforcement actions related to crypto-assets.
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