According to the report that was released by the Reserve Bank of India, the Financial Stability Board (FSB) do not consider Bitcoin and other digital currencies as a major threat to the global economy.
January 7, 2019 | AtoZ Markets – The Financial Stability Board (FSB), which is one of the most important global banking institutions that monitor the global economy has stated that it is convinced that Bitcoin (BTC) and other digital currencies do not pose a major threat to the world economy.
This report, released by the Reserve Bank of India (RBI) also added that while their assessment of virtual currencies could change in the future, they should, however, be monitored as the market continues to evolve rapidly. Regarding the mater, the report reads:
“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 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.”
Crypto Volatility a Matter of Concern to FSB
In October 2018, the FSB published a document in which they remarked that digital assets were not a viable way to store value. Although they do not threaten the world economy, they are of the view that cryptocurrencies are not an ideal means of payment.
At that time, the report, nevertheless warned, that cryptos are problematic due to their price volatility, as they could pose a threat to the world financial stability if an investor’s confidence eroded.
Commenting on this initial assessment made by the Financial Stability Board, the Governor of the Bank of England, Mark Carney, said back in March 2018, that there are no risks to the global financial stability at this time.
Similar to Bitcoin, that was created 10 years ago by Satoshi Nakamoto, FSB was created in 2009 after the global financial crisis that occurred in 2008, by finance ministers and central bank governors, all of which are members of G20.
The G20 is an international forum that comprises 19 wealthiest industrialized countries in the world as well as the European Union. The Financial Stability Board tries to monitor the economy while the G20 members tend to recommend specific policies to improve financial stability globally.
Cryptos are Great for Criminals: Jerome Powell
While many crypto critics would probably have wanted a back-slapping endorsement, FSB’s analysis of Bitcoin was not a harsh rebuke.
While addressing US lawmakers back in July 2018, embattled Federal Reserve chairman, Jerome Powell, said that cryptocurrency has no intrinsic value and is mostly useful for criminals. He testified before House Financial Services Committee saying:
“Cryptocurrencies are great if you’re trying to launder money or hide money, so we have to be very conscious of that…It’s not really a currency. It doesn’t really have any intrinsic value, so I think there are investor and consumer protection issues as well.”
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