FSB looks at crypo-asset market monitoring

The Financial Stability Board has reported to the G20 Finance Ministers and Central Bank Governors on its work in relation to crypto-asset markets. It has worked with the CPMI to set up a framework for monitoring the financial stability implications of market developments, and has been working out the metrics for monitoring that it will use.

FSB does not believe crypto-assets pose a material risk to global financial stability. Its current focus is on understanding the potential effects of falling valuations and it will be looking at the use of leverage and exposures of financial institutions to crypto-asset markets. It will also consider trading volumes, pricing, clearing and margining for crypto-asset derivatives.

The report also mentioned the work of:

  • the CPMI in looking at application of DLT and payment innovations;
  • IOSCO’s consultation on ICOs and how to address domestic and cross-border issues that arise from them and create risks to investors, and also its work on regulatory issues around crypto-asset platforms; and
  • the Basel Committee in looking at direct and indirect bank exposure to crypto-assets and the prudential treatment of such exposures.

Separately, FATF is looking at money laundering and terrorist finance risks.