Bank of England governor and head of the Financial Stability Board (FSB) Mark Carney told G20 members that cryptoassets “do not pose risks” to the world’s economy in a letter dated March 13, Reuters reported Sunday, March 18.
The letter was addressed to G20 Finance Ministers and Central Bank Governors, who will gather for the summit in Argentina starting Tuesday March 20. In it Carney dispels the idea that Bitcoin and other cryptocurrencies are having an adverse effect on financial security.
“Responding to the concerns of members, the FSB has undertaken a review of the financial stability risks posed by the rapid growth of crypto-assets,” the letter reads.
“The FSB’s initial assessment is that crypto-assets do not pose risks to global financial stability at this time. This is in part because they are small relative to the financial system.”
This week’s G20 summit has been a red letter day in the cryptocurrency industry for several months. As early as December 2017, international regulators and politicians signalled they would use the event to bring the topic of crypto regulation to the international stage, pushing for a coordinated future roadmap.
Carney has already appeared to move markets, with BTC/USD jumping by around $1,000 as the letter circulated Monday, March 19. Bitcoin is currently trading at an average of $8,300, up 7.25 percent in the 24 hours to press time.
Carney himself had also previously voiced the need for regulating rather than banning cryptocurrencies, despite claiming in February that Bitcoin had “failed” as a currency.
Compared to legacy debt, however, such new assets are no cause for concern, he now writes:
“Even at their recent peak, [cryptoassets’] combined global market value was less than 1% of global GDP. In comparison, just prior to the global financial crisis, the notional value of credit default swaps was 100% of global GDP.”
Going forward, he adds, the FSB “will identify metrics for enhanced monitoring of the financial stability risks” should usage of those assets continue to grow, “updating the G20 as appropriate.”