FSB Concludes that Cryptocurrency is a Developing Threat

The Financial Stability Board, an advisory body to the G20 organisation, has published a report on the implications of cryptocurrency. The report is considerably more pessimistic than the one that it published a few months ago.

It has now concluded that cryptocurrency poses a number of potential threats to financial stability. The risk is not significant currently because of the limited size of the market, but the risk becomes more significant as the market grows.

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Its conclusions are based on a “monitoring framework” which it has developed, “predominantly based on public data”.

Financial institutions exposed to cryptocurrency in one third of G20 countries

The FSB says that cryptocurrency trading platforms operate in the vast majority of its member jurisdictions, and regulated financial institutions were dealing with them in some form in roughly one third.

It has concluded that cryptocurrency “lack the key attributes of sovereign currencies”,…