The chairman of the Financial Stability Board said that the sudden progress of the crypto market may pose a big risk to global financial stability.
Crypto & blockchain adoption surging rapidly with huge numbers of road bumps, thanks to the government agencies’ attitude & understanding of cryptocurrencies. Almost every government agency is looking to work for the crypto industry, ban or regulation, because they see this market as a big risk under an unregulated system.
Recently Klaas Knot, President of the Dutch central bank and Chairman of the FSB, stated through a recent announcement that cryptocurrency trading is easily possible under the regulatory framework system, which remains outside the risks like illegal use or terrorist financing.
At the same time, Knot asserted that the presence of wrongdoers may help to facilitate illegal activities for the bad actors and it cannot be ignored.
In particular, Knot took the reference of the Russia vs Ukraine conflict and said that the recent war situation defined the ability of Cryptocurrencies, that it can help money-laundering, ransomware, and cyber-crime.
Knot noted that the crypto industry is growing rapidly and this rapid increment in the interest and growth may result in a risk for the global monetary ecosystem.
FSB chairman added:
“The bottom line of our assessment is that crypto-assets are fast evolving and could soon threaten global financial stability. The rapid evolution and international nature of these markets also raise the potential for regulatory gaps, fragmentation, or arbitrage.”
Knot asserted that they will focus on introducing a better regulatory framework in the crypto industry to bring the crypto activities outside the risky factors. He also asserted that the agency will focus on the policy creation of Cryptocurrencies, which are backed by nothing (stablecoins).
It is interesting to see that statements by the government agencies on the Cryptocurrencies, backed by nothing, or say stablecoins are getting huge traction and discussion because the third biggest Stablecoin UST faced a huge downfall in the actual value of $1.