International Finance Watchdog In Surprise Bitcoin Backing As It Reveals Crypto Stocktake

International financial watchdog, the Financial Stability Board (FSB), has released a report that found bitcoin and cryptocurrencies do not currently pose a material risk to the global financial system.

According to a report published by the watchdog, cryptocurrencies “do not pose a material risk to global financial stability at this time.”

Meanwhile, the FSB — which has members from the G20 major economies, the European Commission — said it planned to monitor cryptocurrency assets at banks and the world’s largest financial systems.

The report also revealed the Basel Committee on Banking Supervision (BCBS) — which is part of the FSB — is gathering data on its member banks’ direct and indirect exposure to cryptocurrency in an effort to quantify the potential impact of the technology.

The FSB, which is headed by Bank of England governor and bitcoin and crypto sceptic Mark Carney, earlier this year delivered a letter to the G20 finance ministers and central bank governors declaring that bitcoin does not post a “systemic risk” to the global financial system but has now doubled down on its earlier recommendation.

Earlier this year Carney warned bitcoin could be heading for a “pretty brutal reckoning,” saying cryptocurrencies have “all the hallmarks of a bubble.”

Carney said that bitcoin and other cryptocurrencies were “failing” in their key objectives and called for regulation of the space.

However, bitcoin and cryptocurrency were handed support from researchers at Imperial College London last week, who said digital currencies are primed for mass adoption.

The FSB report signals a move towards a global standard on bitcoin and cryptocurrnecy regualtion — something many digital currency companies have been calling for in recent years.

According to its report, the FSB will “help to identify and mitigate risks to consumer and investor protection, market integrity, and potentially to financial stability”.

The bitcoin price, which has been struggling in recent months following its huge bull run last year, jumped on the release of the report yesterday.

bitcoin price chart

The bitcoin price climbed sharply on the release of the FSB reportCOINDESK

Meanwhile, the bitcoin price was given further support yesterday by the news that BlackRock, the world’s biggest asset management company, is looking to invest in the cryptocurrency.

Larry Fink, the chairman and CEO at BlackRock told Bloomberg:

We are looking at it and as I have said in the past, we are very excited about blockchain technology.

That is where we are looking at it even in the Aladdin universe with what we are trying to do there so we are looking at blockchain technologies.

We are studying it and we are looking at how they perform and we are looking at that type of data as we understand it as we think about other products but right now, worldwide I have not heard from one client that needs to be in it right now.