Financial Stability Board Unveils Cryptocurrency-Monitoring Framework, Cryptocurrencies Not Considered a Danger to Global Financial System
The Financial Stability Board (FSB) has unveiled its monitoring framework for cryptocurrencies. The FSB framework comes as the Finance Ministers and Central Bank Governors of the G20 member nations head for a summit in Buenos Aires, Argentina. Since 2017, some member states have called on the G20 to pay particular attention to the emerging cryptocurrency market.
As part of its report, the FSB said that cryptos held no danger to the global financial industry. The Board also highlighted some of its collaborative efforts with other partners to adequately examine and monitor the cryptocurrency space.
Details of the FSB Cryptocurrency-Monitoring Framework
According to the press release announcing the unveiling of the new FSB framework, the Board has been working in tandem with the Committee on Payments and Market Infrastructure (CPMI). Together, both bodies have tried to evaluate the impact of Bitcoin and other cryptos on global finance.
The FSB has also created robust metrics that will enable it to keep an eye on the significant developments shaping the virtual currency industry. These metrics monitor trading volumes, clearing and margining for virtual currency assets, as well as pricing. The Board also said that monitoring cryptos was part of its mandate to watch out for obvious weaknesses in global finance.
Apart from the CPMI, the FSB also reported that other standard-setting bodies had been part of the collaborative process. These bodies include the International Organization of Securities Commissions (IOSCO) and the Basel Committee on Banking Supervision (BCBS). The former has developed an ICO regulatory framework while the latter focuses on crypto-related risks to the banking sector.
Cryptocurrencies aren’t a Danger to the Global Financial System
According to the FSB, cryptocurrencies do not significantly threaten the stability of the global financial system. However, the Board recognizes the need for constant monitoring of the industry to limit any risk exposure.
Thus, the FSB recommends that focus should be placed on the money transmission aspect of the industry. In that way, the G20 watchdog believes that regulators can follow the size and growth of virtual coins.
Mike Carney, the chairman of the FSB shared a similar sentiment. Earlier in the year, he also remarked that Bitcoin and other cryptos posed no threat to the global financial industry. However, Carney raised issues over the ability of virtual coins to support criminal activity due to their anonymous transactions.
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