The FSB (Financial Stability Board) of the UK resisted G20 member requests to develop new regulations for Bitcoin and other cryptocurrencies. In his letter to G20 central bankers and financial ministers, FSB Chair Mark Carney said, “The FSB’s initial assessment is that crypto-assets do not pose risks to global financial stability at this time.”
Rather than creating new banking and market reforms, the global watchdog will instead look to utilizing existing rules and applying them to this new market. At present, the cryptocurrency market was worth less than 1 percent of global GDP at its peak, according to Reuters. The FSB suggested that more international coordination would be required to monitor what it perceives to be a rapidly evolving but small sector.
Carney’s governorship at the Bank of England ends next year, and whoever takes his place will inherit the job of reviewing rules, instead of creating new ones. The new governor’s responsibilities will also include wrapping up the solution to the recent financial crisis and measuring the successes and failures of the G20 reforms. This follows President Donald Trump’s executive order for American regulators to scale back on reforms to stimulate more lending in the US economy.
Carney outlined a set of rules that the FSB will review. These include reforms that were designed to provide more transparency in the derivatives markets, and how existing rules have impacted small businesses.
This news out of the UK could prove bullish for Bitcoin, Ethereum and other cryptocurrencies in much the same way as the Senate hearing with the SEC and CFTC in the US. In addition to reassuring digital currency investors that the FSB has no immediate plans to restrain this blossoming industry, the news may squash a great deal of FUD about the industry as a whole. People feared an all-out ban on Bitcoin and other cryptocurrencies in South Korea, and the regulations turned out to be some age restrictions and KYC (Know Your Customer) requirements for exchanges.
Global economic leaders will have their first meeting in Buenos Aires, Argentina on Monday. Participants include Finance Ministers and Central Bank Governors from the “Group of 20” which includes the European Union, the United States, the UK, China, and nations from every economic center in the world. At this conference, 22 finance ministers, 17 central bank governors and 10 leaders of international organizations. Topics of discussion will include international financial architecture, tax systems and financial regulation. The impact of new technologies such as cryptocurrencies on these old systems.
According to the G20 website, cryptocurrencies will be discussed. Ideas will be exchanged about the possible financial inclusion of cryptocurrencies, as well as the perceived risks including financial instability, tax evasion and the financing of illegal activities. It is expected that any decisions that come out of the closed-door meeting would be designed to mitigate the aforementioned risks without discouraging innovation in blockchain or other technology. At the end of the meeting, the group will produce an official communique to summarize major decisions.