Global regulators have published a framework for “vigilantly” monitoring risks from crypto assets like Bitcoin and ether, even though they don’t pose a major risk to financial stability for now, reported Reuters.
Start ups have begun issuing new digital currencies via initial coin offerings, raising concern among regulators over investor protection.
The aim of the new framework is to spot any financial stability risks early enough to take action.
The Financial Stability Board (FSB), which coordinates financial regulation for the Group of 20 Economies, said the framework focuses on how risks from crypto asset markets could spread to other parts of the financial system.
“Monitoring the size and growth of crypto-asset markets is critical to understanding the potential size of wealth effects, should valuations fall,” the FSB said in a statement, reported Reuters. “The use of leverage, and financial institution exposures to crypto-asset markets, are important metrics of transmission of crypto-asset risks to the broader financial system.”
Full Content: Reuters
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