The Financial Stability Board is warning about the increasing adoption of crypto. FSB is a body internationally which monitors and prepares advice about the financial system globally.
According to a report from Financial Stability Board, the market for crypto is growing rapidly and it could get to a point where they may pose a threat to the financial stability of the globe.
FSB stated that "the market capitalization for crypto increased by 3.5 percent in the year 2021, still compared to the global financial system assets, it's small."
FSB does realize DeFi as the growing emerging sector on a faster rate. FSB argued that some of these platforms doesn't cope with the laws and regulations and operate outside of the regulatory framework which could prove risky.
Stablecoins are recently being used as a intermediary between the fiat and crypto bringing implications for the stability and function of the global market for crypto assets. And if a major stablecoin fail then it could disrupt the trading happening around the crypto assets, saying FSB.
FSB further said that they intend to monitor the developments and risks involved in the cryptocurrency, and search for the regulatory and other implications of these cryptoassets to address the threats to the stability of finance.
I am still trying to understand how could the cryptoasset be a threat to the global financial stability. I believe it could support the global economy if it's regularized in a way that is acceptable to both the sides.