The Financial Stability Board, a global body that monitors the international economy has said that crypto assets are not a threat to global financial stability.
According to a report by the Reserve Bank of India, “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 central bank of India stated this in its latest report on the impact of cryptocurrencies to their national economy, as the battle for the legality of decentralized assets continues in the Asian country. “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,” the report continued.
The original FSB report was published in October 2018, where the global body stated that cryptocurrencies were not a good method of storing the value as they fluctuate wildly. The report, although saying that global economy is not threatened, cryptocurrencies do have the potential to erode investor confidence due to their inherent price volatility.
A group formed by G20 finance members back in 2009 in the aftermath of the 2008 financial crisis, it monitors the world’s economy and offers tactics that would give stability to the whole system. Although the policies recommended by the group has no legal status, the G20 members take those into consideration.
FSB is not the only organization that closely watches Bitcoin and other cryptocurrencies and the impact on the economy. The US Federal Reserve is also keeping an eye on cryptocurrencies. In April 2018, governor of the Federal Reserve Lael Brainard said, “One area that the Federal Reserve is monitoring is the extreme volatility evidenced by some cryptocurrencies.”
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