The Financial Stability Board (FSB) has outlined a comprehensive plan to monitor the pre-emptive market and control what they consider to be a material risk to the system. global financial system.
The G20 reveals the legal framework for coding money
On Monday, the G20 financial manager announced a strategy to determine if codecs like Bitcoin and Ethereum posed a risk to financial stability. In a 10-page report, the FSB provides a legal framework that can assist countries in the G20 to identify the risks associated with pre-encrypted data using public data.
According to the report, "can highlight risk" indicators include market capitalization (size and growth rate), price and price volatility. Basically, pre-coding with unusually high growth rates and volatility may pose a risk to financial stability if their total value is more competitive than conventional markets.
FSB officials also provide a deeper analysis of what they call the wealth effect metric and institutional data. ICCs and capital inflows into the blockchain arena are classified into effective asset performance indicators. In terms of institutional data, the FSB recommends that everyone keep track of trading volume, deposit rates and interest rates among traditional lenders.
The FSB says that such a framework would "help identify and reduce risks, protect users and investors, market integrity and financial stability."
FSB expands monitoring effort
In March, the FSB was evaluating the pre-coding market but did not determine whether it was a major risk to financial stability.
Bank of England Governor Mark Carney issued the following decision:
"The FSB's initial assessment is that at this time, pre-coded assets do not pose a risk to global financial stability. Because they are smaller than the financial system.
The size of this market is small, and the fact is that pre-coding will not replace the current currency and very little is used in the real economy and financial transactions, meaning the relationship of money. Encryption with the financial system is limited. "
At the time of the decision, the total pre-coded market was valued at about $ 300 billion, not much different from the current level. The market peaked at $ 830 billion earlier this year, triggering an investigation into pre-encrypted assets.
While pre-coding represents only a small part of the global financial system, it makes a huge contribution, directly or indirectly, to the economy. The explosion of pre-coding has created positive changes that help maintain the size and growth of digital assets in the economy, as well as a bustling startup that makes capital outperforming. Too much investment in joint ventures in the first phase.
For many, institutional rights are the next turning point for digital currency to be widely applied. Large banks and hedge funds are also experimenting with blockchain technology.
The race for custodial services and efforts to launch the first ETF bitcoin also showed that this market has the potential to attract a large amount of capital. These developments show that Carney may have to revise his previous claims about pre-encrypted assets that are still limiting when used in the real economy.