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On July 20 the G20 Ministers of Finance and Central Bank Governors received a framework for monitoring the financial stability implications of crypto-assets markets, as developed by the Financial Stability Board (FSB), in collaboration with the Committee on Payments and Market Infrastructures (CPMI). The purpose of the framework is to identify any emerging financial stability concerns. It discusses primary risks within crypto-assets as well as within potential transmission channels. As described by Carol Van Cleef at NASBA’s June 2018 Regional Meetings and as the FSB states in its report, while crypto-assets raise issues about consumer and investor protection, they also have the potential to improve efficiency of the financial system.

The framework specifies the metrics which the FSB could use to monitor financial stability. These metrics are mainly based on public data, and the FSB cautions that the quality of the underlying data can vary and may not fit all types of crypto-assets equally. It explains that “As understanding develops and new sources of public data become available, the FSB with CPMI, will consider how improvements can be made.”

The report to the G20 also describes the work on crypto-assets that various standard-setting bodies are presently doing:

  • CPMI is studying the application of distributed ledger technology and is conducting outreach, monitoring and analysis of payment innovations.
  • International Organization of Securities Commissions (IOSCO) has established an initial coin offering Consultation Network, is developing a Support Framework and is discussing regulatory issues around crypto-assets platforms.
  • Basel Committee on Banking Supervision (BCBS) is assessing the materiality of banks’ direct and indirect exposure to crypto-assets.

“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 FSB stated in its press announcement