G20 watchdog rejects crackdown on cryptocurrencies

G20 watchdog rejects crackdown on cryptocurrencies

Cryptocurrencies such as Bitcoin do not currently pose risks to global financial stability, according to a G20-backed watchdog, resisting calls to regulate the market.

With the price of bitcoin soaring and plummeting over the last year, some G20 member states have begun calling for stronger regulatory action. Earlier this month, Bank of England governor Mark Carney called for new cryptocurrencies rules to protect the public and financial markets.

However, there is no consensus on the issue, meaning that Carney, in his role as chair of the Financial Stability Board (FSB), has now written in a letter to G20 finance ministers and central bank governors that the FSB's "initial assessment is that crypto-assets do not pose risks to global financial stability at this time".

The letter, published ahead of a G20 meeting in Buenos Aires this week, does say that the assessment could change if cryptocurrencies were to become significantly more widely used or "interconnected with the core of the regulated financial system".

To help judge this, the FSB says it will set out metrics for better monitoring of the financial stability risks of Bitcoin and its fellow cryptocurrencies. And, while national authorities have begun making moves to address the issue, the FSB says that the global nature of the markets means that international coordination is warranted.

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