Mark Carney: "Crypto poses no risk to financial stability"
Good news for the crypto market. The financial regulator of the G20 claims that crypto coins do not currently pose a risk to global financial stability. Mark Carney, president of the Financial Stability Board and also of the Bank of England, rejects requests from G20 members to carry out stricter controls on cryptocurrencies. This means that quite a bit of pressure from the 'crypto boiler' disappears.
"Mark Carney's letter came on Sunday, March 18, the evening before the members of the G20 meet for the G20 summit Argentina. The letter states that the Financial Stability Board (FSB) does not consider crypto coins to be risky for the financial system."
FSB president Carney thinks that the 'share' of crypto coins is too small to be dangerous. At the moment, the market value of crypto is only 1 percent of the global GDP. Moreover, these coins are not able to replace real currency. The applications for crypto remain fairly limited. The FSB currently sees no danger in virtual coins.
He went on to state:
“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,” he added. “In comparison, just prior to the global financial crisis (in 2008), the notional value of credit default swaps was 100% of global GDP.”
No new rules
Carney's position has not changed with regard to crypto coins, but the letter does give us a small foretaste of what the G20 members will discuss in Argentina in the coming days.Countries such as France, Japan and the United States of America have called several times to deal with speculation in the crypto market and to regulate trade.This is not a bad idea in itself, but according to Carney, no new rules will be drawn up specifically for this subject. There are currently rules that have been put in place to support governments and banks after the financial crisis. Instead of creating new rules, the existing rules can be revised if it ever comes to the point that crypto poses a risk.The crypto market turned dark green on Monday thanks to Carney's statements. Almost all cryptocurrencies recovered well and thus made up for their losses over the past few days.
"Mark Carney's letter came on Sunday, March 18, the evening before the members of the G20 meet for the G20 summit Argentina. The letter states that the Financial Stability Board (FSB) does not consider crypto coins to be risky for the financial system."
FSB president Carney thinks that the 'share' of crypto coins is too small to be dangerous. At the moment, the market value of crypto is only 1 percent of the global GDP. Moreover, these coins are not able to replace real currency. The applications for crypto remain fairly limited. The FSB currently sees no danger in virtual coins.
He went on to state:
“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,” he added. “In comparison, just prior to the global financial crisis (in 2008), the notional value of credit default swaps was 100% of global GDP.”
No new rules
Carney's position has not changed with regard to crypto coins, but the letter does give us a small foretaste of what the G20 members will discuss in Argentina in the coming days.Countries such as France, Japan and the United States of America have called several times to deal with speculation in the crypto market and to regulate trade.This is not a bad idea in itself, but according to Carney, no new rules will be drawn up specifically for this subject. There are currently rules that have been put in place to support governments and banks after the financial crisis. Instead of creating new rules, the existing rules can be revised if it ever comes to the point that crypto poses a risk.The crypto market turned dark green on Monday thanks to Carney's statements. Almost all cryptocurrencies recovered well and thus made up for their losses over the past few days.