Reg­u­la­tors say crypto as­sets no threat, yet

Shanghai Daily - - BUSINESS - FIN­TECH (Reuters)

CRYPTO as­sets such as bit­coin do not pose a threat to fi­nan­cial sta­bil­ity but mon­i­tor­ing is needed along with pos­si­ble ac­tion to pro­tect con­sumers, the global Fi­nan­cial Sta­bil­ity Board said yes­ter­day.

While price in­creases in crypto as­sets have been larger than com­pa­ra­ble his­tor­i­cal as­set bub­bles, mar­ket cap­i­tal­iza­tion re­mains small com­pared with other fi­nan­cial mar­kets, the FSB said.

“Based on the avail­able in­for­ma­tion, crypto as­sets do not pose a ma­te­rial risk to global fi­nan­cial sta­bil­ity at this time. How­ever, vig­i­lant mon­i­tor­ing is needed in light of the speed of mar­ket de­vel­op­ments,” it said.

None­the­less, the FSB said, “Illiq­uid­ity, con­cen­trated own­er­ship, frag­mented mar­ket struc­ture, and other is­sues also make crypto as­sets po­ten­tially sus­cep­ti­ble to price ma­nip­u­la­tion.”

It said to­tal mar­ket cap­i­tal­iza­tion peaked at US$830 bil­lion in Jan­uary, with a third ac­counted for by bit­coin alone, drop­ping to US$210 bil­lion by last week or just 2.8 per­cent of the global value of gold.

“Crypto as­sets also raise sev­eral broader pol­icy is­sues, such as the need for con­sumer and in­vestor pro­tec­tion,” said the FSB, which co­or­di­nates fi­nan­cial reg­u­la­tion for the Group of 20.

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