The Financial Stability Board (FSB) published a report on crypto asset markets. It sets out the analysis behind the FSB’s proactive assessment of the potential implications of crypto-assets for financial stability.
The report includes an assessment of the primary risks present in crypto assets and their markets, such as low liquidity, the use of leverage, market risks from volatility, and operational risks. Based on these features, crypto assets lack the key attributes of sovereign currencies and do not serve as a common means of payment, a stable store of value, or a mainstream unit of account.
Based on the available information, crypto assets do not pose a material risk to global financial stability at this time. However, vigilant monitoring is needed in light of the speed of market developments. Should the use of crypto assets continue to evolve, it could have implications for financial stability in the future.
Such implications may include: confidence effects and reputational risks to financial institutions and their regulators; risks arising from direct or indirect exposures of financial institutions; risks arising if crypto assets became widely used in payments and settlement; and risks from market capitalization and wealth effects.