G20 Watchdog Releases Report for Monitoring Cryptocurrencies

The advisory body of the G20 - The Financial Stability Board (FSB) has recently published a framework for the ‘vigilant’ monitoring of the cryptocurrency assets. The released report talks about the progress made so far towards firing the cryptocurrency regulations.

In the official announcement on Monday, July 16, a standardized framework was released along with a report which has been submitted to all the central bank governors of the G20 as well their finance ministers.

The standardized framework has been developed by the FSB while working in coordination with the Committee on Payments and Market Infrastructures (CPMI), the Basel Committee on Banking Supervision (BCBS) and the International Organization of Securities Commissions (IOSCO).

A brief from the framework report reads: “The objective of the framework is to identify any emerging financial stability concerns in a timely manner. To this end, it includes risk metrics that are most likely to highlight suck risks, using data from public sources where available.”

The report also lists several metrics that FSB will be using to monitor all the developments in the cryptocurrency market and "should help to identify and mitigate risks to consumer and investor protection, market integrity, and potentially to financial stability.”

Moreover, the FSB also said that they don’t think that digital currencies pose any risk to the global financial systems at this point in time. It said: “Crypto-assets do not pose a material risk to global financial stability at this time. Monitoring the size and growth of crypto-asset markets is critical to understanding the potential size of wealth effects, should valuations fall.”

However, it also says that it will be strictly monitoring the crypto space. "While the FSB believes that crypto-assets do not pose a material risk to global financial stability at this time it recognizes the need for vigilant monitoring in light of the speed of market developments.”

The report also mentions that in addition to the FSB, regulatory bodies from around the globe and different countries have stepped up measures to monitor specific areas of the cryptocurrency market. For e.g. the IOSCO is also working on developing a common framework that can help members countries to understand the impact of domestic and foreign investments in the ICO market.

On the other hand, the BCBS is gathering information from the member banks to understand the direct and indirect effect of cryptocurrencies as well as the potential impact of the technology.

Bank of England governor Mark Carney, who is currently heading the FSB also said that the agency will release timely reports for increasing market confidence and gather intelligence.