A fresh report from the Financial Stability Board (FSB) is out, predicting what effects cryptocurrencies may have on the economy. Although it notes that cryptocurrencies are continuing to ”evolve rapidly,” the report suggests the cryptocurrencies do not threaten the economy.
FSB: Crypto-assets do not pose risks to global financial stability
The Financial Stability Board is an organization intended to monitor the current state and future prospects of the global economy. However, these observations from the FSB became clear as they were included in a recent report from the Reserve Bank of India (RBI).
In the report, it is noted that the FSB has examined cryptocurrencies and how they may affect the economy. The FSB’s recommendations are also ”considered” by the G20 nations.
The report highlights the rapid evolution of cryptocurrencies, and that this leaves a lot of room for future improvement. However, it ultimately comes to the conclusion that cryptocurrencies do not currently ”threaten” the word’s existing financial stability.
”The FSB has undertaken a review of the financial stability risks posed by the rapid growth of crypto-assets. Its initial assessment is that crypto-assets do not pose risks to global financial stability currently,” the report reads.
”The market continues to evolve rapidly, however, and this initial assessment could change if crypto-assets were to become more widely used or interconnected with the core of the regulated financial system.”
This statement echoes earlier FSB sentiment relating to cryptocurrencies. In October of 2018, the organization published a report which noted that although it did not consider cryptocurrencies an ideal means of payment nor a sustainable store of value, cryptocurrencies did not pose a threat to the global financial system.
FSB report suggests cryptocurrency investor confidence not eroded
At the time, the FSB remarked that price volatility was one of the main problems with cryptocurrencies. Moreover, the October report also suggested that cryptocurrencies could potential become a threat to the world economy if they would erode investor confidence.
However, this latest report makes it clear that cryptocurrencies are currently not considered a threat to the economy. This comes amid a general stock market downturn which, ultimately, roughly wiped out all of 2018’s stock market gains.
It remains to see what the FSB’s stance on the matter would be once cryptocurrencies become more ingrained with the ”global financial system.” However, it is worth noting that the FSB’s verdict on the matter is decidedly not negative.
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Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the blockchain industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.