Bitcoin and other cryptocurrencies do not pose a threat to the global economy, but they must be monitored as the market “continues to evolve rapidly.” That is the assessment of the Financial Stability Board (FSB), an international body that analyzes the world economy.
The observations came to light in a December 28 report by the Reserve Bank of India (RBI), the central bank of India. The RBI report noted:
The FSB undertook a review of the financial stability risks posed by the rapid growth of cryptoactives. Its initial assessment is that cryptographic assets do not pose risks to global financial stability at present.
However, the market is evolving rapidly, and this initial assessment could change if the assets were used or interconnected more broadly with the core of the regulated financial system.
The new comments were a reiteration of an October2018 report published by the FSB. There the group observed thatcryptocurrencies were not a store of viable value or an ideal means of payment,but they did not threaten the world economy. In addition, in March of last yearhe also said the same to the G20, the group of countries with the 20 moststrengthened economies in the world.
However, this report warned that cryptocurrenciesare problematic due to the volatility of their prices and could only representa threat to the global economy if they erode investor confidence.
The Financial Stability Board was created in 2009by the finance ministers of the G20 and the governors of the central banksafter the global financial crisis of 2008. The G20 is an international forumcomposed of the 19 richest industrialized countries in the world and the UnionEuropean
The FSB monitors the global economy and makesrecommendations to promote stability. The policies developed by the FSB are notlegally binding, but the G20 considers their opinions, according to itswebsite. While Bitcoin’s FSB analysis was not an endorsement, it was not a hardreprimand either.
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