According to the Financial Stability Board (FSB), cryptocurrencies do not pose threats to the world economy or financial stability. The FSB is an international body with 20 members that are also part of the G-20. The announcement made by the FSB could play an important role in countries were governments are taken hard measures against virtual currencies.
The FSB Says Cryptos Not A Threat to Financial Stability
During 2018, virtual currencies have been in a bear market. This has raised concerns among analysts that were worried about the effects that these assets could have on the global financial stability. As we enter into 2019, cryptocurrencies seem to be receiving good news from the FSB.
According to a report released by Quartz, the FSB considers that virtual currencies are not a threat to the world economy. The FSB was established back in 2009 after the financial crisis that affected the whole world. Finance ministers and central banks from the G20 are active FSB participants.
This information released by the FSB could change the decision taken in some countries to go behind virtual currencies. For example, India has decided to regulate the market and persuade companies not to start crypto-related businesses in the country.
In the United States, the situation is different. The U.S. Securities and Exchange Commission (SEC) has been trying to take a more active approach to regulate Initial Coin Offerings (ICOs). In general, most of them can be considered illegal securities offerings.
Nischal Shetty, the CEO of the cryptocurrency exchange WazirX, commented:
“The US has been deliberating on digital currencies for the last 12-18 months and for 2019 the (market regulator) Securities and Exchange Commission has mentioned digital assets as a priority. It is expected that other countries including India will also take a cue from the US and will come out with concrete laws after it.”
The Indian cryptocurrency market has been requesting more clarity to operate. Companies and participants must have a clear legal framework knowing that their investments are protected. Although the government in India has taken hard measures against crypto market participants, there are no regulations in the country. This is something that would have to be analyzed and improved.
In the past, we wrote that the governor of the Bank of England, Mark Carney, explained that the FSB initial assessment on virtual currencies was that crypto assets do not pose risks to financial stability.
Carney also explained that his successor at the Bank of England would also be focusing on analyzing new rules and pushing new standards.