In a letter sent to the G20 Finance ministers and central bank governors, the chair of the Financial Stability Board Mark Carney has stated that cryptocurrencies such as bitcoin do not pose risks to the global financial stability at the moment.
The letter, dated March 13, comes ahead of the G20 meeting in Buenos Aires on 19-20 March. The meeting’s agenda showed that cryptocurrencies is one of the areas which will be discussed during the meeting.
“The FSB’s initial assessment is that crypto-assets do not pose risks to global financial stability at this time. This is in part because they are small relative to the financial system. Even at their recent peak, their combined global market value was less than 1% of global GDP. In comparison, just prior to the global financial crisis, the notional value of credit default swaps was 100% of global GDP,” Carney wrote.
He said, however, that this initial assessment could change if crypto-assets expanded their reach or became interconnected with the core of the regulated financial system. Carney said that the FSB will identify metrics and any data gaps in order to support monitoring and timely identification of emerging financial stability risks.
“Crypto-assets raise a host of issues around consumer and investor protection, as well as their use to shield illicit activity and for money laundering and terrorist financing,” he said while calling for global cooperation and coordination on these issues. “At the same time, the technologies underlying them have the potential to improve the efficiency and inclusiveness of both the financial system and the economy.”
