The G20 is presented with a 17-page report about cryptocurrencies. It doesn’t make for particularly fun reading…
The Financial Stability Board – the FSB – is an advisory body to the G20 group of countries. And whilst it doesn’t have direct power, it’s not an organisation without influence. As such, its new warnings about cryptocurrencies – and they’re not on the chipper side – are likely to be heeded.
It’s published a new report that has expressed sizeable cautions over cryptocurrencies, that build on an already-pessimistic document it released earlier this year.
The new report identifies a series of what it sees as key risks. Amongst them are the fact that cryptocurrency ownership is concentrated amongst a small group of people, that many currencies aren’t registered and thus different coins are playing by different legal rules (or otherwise), and then the overall volatility of the market as a whole.
Furthermore, the FSB added a note of caution over technology risks, the decentralised nature of cryptocurrencies, and the implications over major institutions getting involved with crypto.
It’s not the cheeriest document for the cryptocurrency community, and just to ice this particular cake, it recommends specifically at the end the need for “vigilant monitoring” of the cryptocurrency community.
The FSB, incidentally, is chaired by the Bank of England governor Mark Carney, who himself has expressed concerns over cryptocurrencies on more than one occasion this year.
The full report, entitled ‘Crypto-asset markets: Potential channels for future financial stability implications’, is available for you to have a read here. It’s 17 pages long in all.
All eyes, then, on the G20 countries to see how they respond. There’s not an awful lot of sign though that cryptocurrencies are particularly high up their agenda.