Over the course of 2018, the Financial Stability Board (FSB) worked to assess the significant implications of crypto-assets . It concluded that, based on the available information, they do not pose a material risk to global financial stability at this time. However, the study raised several broader policy issues, and vigilant monitoring is thought to be needed in light of the speed of market developments.

This report sets out the reasoning behind this view, and describes the FSB’s framework for monitoring potential financial stability risks.

The FSB’s assessment includes consideration of the primary risks present in crypto-assets and their markets, such as low liquidity, the use of leverage, market risks from volatility, and operational risks. Based on these features, crypto-assets lack the key attributes of sovereign
currencies and do not serve as a common means of payment, a stable store of value, or a mainstream unit of account.

In addition to the risks covered in this report, crypto-assets raise policy issues that do not currently present financial stability concerns, such as the need for consumer and investor protection; strong market integrity protocols; anti-money laundering and combating the financing of terrorism (AML/CFT) regulation and supervision, including implementation of international sanctions; regulatory measures to prevent tax evasion; the need to avoid circumvention of capital controls; and concerns relating to the facilitation of illegal securities offerings.

Download this research report to find out more.