A recent statement has been come out from the Financial Stability Board (FSB) where it is clearly mentioned that the leading cryptocurrency Bitcoin along with other digital currencies does not affect the world economy. FSB is an international body that plays an important role in monitoring the economy of the world.
The observations brought public on December 28 by the Reserve Bank of India (RBI) – the central bank of India. The report of RBI says that the FSB is undertaking the risks posed by the crypto assets in the financial stability. The initial assessment was released to ensure that the cryptocurrencies do not pose any stability risks to the global economy.
The RBI further added that the crypto market is changing rapidly. This initial assessment could change if the digital currencies become more widely used with the financial system regulations.
Earlier in October 2018, a report from FSB was released where the group mentioned that the digital currencies are not an ideal store of value or a right mode of payment. However, FSB also mentioned in their report that the cryptocurrency is not even a threat to the world economy.
Why Are Cryptocurrencies Considered a Problem?
As per the FSB, the cryptocurrencies are considered to be a problem is because of their price volatility. A change in the price movement of major cryptocurrencies has been seen throughout the year. The news regarding crypto fluctuations has already been covered by AltCoinEra.
The FSB also believe that these rapid up and downs can lead to a threat to the world economy – as investors may step back to invest in the future.
The Financial Stability Board (FSB) was established in the year 2009 by G20 finance ministers along with the governors of central banks. The FSB monitors the global economy – as well as promote its stability through valid recommendations.
It has been noticed that the statement released by the FSB comprised of thoughts of Federal Reserve governor Lael Brainard. As earlier reported, Lael Brainard said that FSB is monitoring the extreme volatility of the crypto prices – primarily focused on Bitcoin. But, it doesn’t mean that the cryptocurrency poses a threat to the financial stability of the United States.