Bitcoin and other cryptocurrencies do not pose a threat to the global economy, but must be controlled as the market "continues to grow rapidly." This is an assessment of the Financial Stability Board (FSB), an international body that monitors the global economy.
The observations were made public in a December 28 report of the Reserve Bank of India (RBI), which is the central bank of India. The RBI report notes:
The FSB conducted an analysis of the risks of financial stability associated with the rapid growth of cryptoactive assets. The initial assessment is that cryptoactives currently do not pose a threat to global financial stability.
However, the market continues to grow rapidly, and this initial assessment may change if cryptoactives become more widely used or interconnected with the core of the regulated financial system.
FSB is concerned about cryptocurrency
These comments were a repetition of the October 2018 report published by the FSB, where the group noted that cryptocurrencies are not a viable repository of value or an ideal means of payment, but do not threaten the global economy.
However, the report warns that cryptocurrencies are problematic due to their price volatility and can pose a threat to the global economy if they undermine investor confidence.
The Financial Stability Board was created in 2009 by G20 finance ministers and central bank governors after the 2008 global financial crisis. The G20 is an international forum that includes the 19 richest industrialized countries in the world and the European Union.
The FSB controls the world economy and makes recommendations for promoting stability. The policy put forward by the FSB is not legally binding, but the G20 takes its opinion into account according to its website.
Although the FSB Bitcoin analysis was not an approving approval, it was not a sharp rebuke, as many crypto haters would probably like.
Federal Reserve: we track bitcoins
The FSB estimate echoes the opinion of the head of the Federal Reserve, Lael Brainard.
As reported by CCN, Brainard said that the Fed monitors the "extreme volatility" of cryptocurrency prices, in particular, Bitcoins, but does not believe that cryptography is a threat to US financial stability.
However, Brainard urged investors to be cautious about the “highly speculative” asset class and said that the Fed will continue to investigate them.
“One of the areas that the Federal Reserve is monitoring is extreme volatility, as evidenced by some cryptocurrencies,” Brainard said in April 2018.
Brainair, who is one of the seven Fed governors, continued: “For example, bitcoin has grown in 2017 by more than 1000% and has fallen sharply in recent months. Important problems in protecting the interests of investors and consumers may arise in these markets, and some of them appear to be particularly vulnerable to money laundering problems. ”
However, Brainard said the Fed does not consider cryptocurrency a current threat to the US economy.
Jerome Powell: Criminals use crypto
Three months later, in July 2018, boss Lael Brainard, armed with Federal Reserve Chairman Jerome Powell, told US lawmakers that cryptography has no intrinsic value and is mainly useful for criminals.
“Cryptocurrencies are good if you are trying to launder money or hide it, so we need to be aware of this,” Powell told the Financial Services Committee at home.
It is not exactly a currency. It really has no intrinsic value, so I think that there are also problems protecting investors and consumers.
Powell was recently sharply criticized after he was accused of undermining the US stock market after the Fed raised interest rates for the seventh time in two years as President Donald Trump.
On the contrary, the Federal Reserve raised the stakes only once during the eight years of the presidency of Barack Obama.