The advancement of crypto as an asset class “may challenge any framework” for financial stability, according to comments made by the chair of the Financial Stability Board (FSB) on February 10.
Talking at a Bank of International Settlements’ (BIS) special governors meeting that was held in Hong Kong, FSB chair, Randal K. Quarles, remarked that the FSB “decided to undertake a review of its framework for assessing vulnerabilities to ensure that we are at the cutting edge of financial stability vulnerability assessment.”
According to the organization, this job of advancing a framework to deal with evolving financial systems will be a daunting challenge, given that:
“developments like the emergence of crypto-assets may challenge any framework[.]”
The agency settled that this task “makes the goal of a robust framework all the more important.”
The FSB is an international body made up of financial institutions, such as central banks and regulators, that issues regulation recommendations.
This report is in contrast with a statement that the FSB made public in October last year. In the previous document, the agency disclosed that cryptocurrencies pose no substantial risk to global financial stability.