G20 Financial Stability Board Summit On Cryptocurrencies
The upcoming G20 summit discussing cryptocurrencies will be held on the 19th and 20th March 2018 in Buenos Aires.
The potential impact of cryptocurrencies and the coordination of international efforts to eliminate data gaps in the emerging cryptocurrency market are the main themes for discussion at the G20 Financial Stability Board.
A week-long drop across the board in crypto values is the result of the significant amount of concern from cryptocurrency investors and traders for the upcoming meetings of G20 in Buenos Aires.
The chairman of the G20’s Financial Stability Board Mark Carney who is an outspoken critic of Bitcoin heads the Financial Stability Board and is also the Governor of the Bank of England.
In his letter to the FSB members, Mark Carney states that “The Financial Stability Board’s initial assessment is that crypto-assets do not pose risks to global financial stability at this time”.
His letter was published to the participating members of the FSB which includes central bankers and finance ministers and Mr. Carney also highlighted:
- the fact that even at their recent peak in the last 2 months of 2017, crypto-assets only account for less than 1% of global economic output, and
- that the intention should be to avoid the establishment of new regulation for cryptocurrencies but rather that existing rules for the governance of digital currencies should be adapted accordingly.
Now that the FSB’s work to “fix the fault lines that caused the financial crisis” is coming to an end, the FSB’s approach is now increasingly moving away from the design of new policy initiatives and is instead moving to the stage of dynamic implementation of the agreed G20 reforms as well as rigorous evaluation of their effects.
After the publication of Mr. Mark Carney’s letter, the cryptocurrency market had an immediate and rapid response. The G20’s announcement that it will pivot away from creating new regulations in favour of examining existing rules gave the cryptocurrency market a much-needed boost, seeing, according to CoinDesk:
- Bitcoin currency capturing over $800 in gains in only one hour (Bitcoin recovered to $8,155.66 as of 7:02 p.m. ET Sunday),
- Ethereum currency spiking over $60 in the same time frame (fell nearly 17 percent from Sunday’s open, hitting a low of $460.09),
- Bitcoin cash currency and Litecoin currency both dropped roughly 10 percent from the open,
- Ripple currency meanwhile fell 14 percent to 55 cents Sunday.
The Financial Stability Board will undergo a thorough review to ensure that the watchdog body is “fit for purpose” when assessing and amending existing financial regulations, Mr. Carney also said.
The news of a relaxed G20 stance toward cryptocurrencies appears to be invigorating what has recently been a sluggish market but it remains to be seen whether or not the market will sustain growth and whether or not lost ground can be recaptured.
Simon Zenios & Co LLC
Tel.: +357 – 24 023370
Email: [email protected]