Bank of England Governor tells G20: cryptocurrencies “do not pose risks.”
The head of the Financial Stability Board (FSB) and Bank of England Governor, Mark Carney, has told G20 members that cryptocurrencies “do not pose risks” to the world economy.
The welcome news sent cryptocurrency prices into the green across the board today.
Bitcoin’s price jumped up by around $1000 from lows over the weekend, according to Coinmarketcap data.
The Coin Thud live price charts show that Bitcoin’s value is up by around 12.5% over the last 24 hours, at time of press.
Mr. Carney’s letter was addressed to Central Bank Governors G20 Finance Ministers.
Members will gather for the annual summit in Argentina that starts on Tuesday, March 20.
Carney message to G20 dispels the misconceived idea that cryptocurrencies such as Bitcoin are having a negative effect on financial security.
In the letter, Mr. Carney states:
“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 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.”
Eased the fears of further regulations
For several months, this weeks G20 summit has been looming as a red letter day for many.
Politicians and international regulators have been signaling that the event will be used to promote a crackdown on cryptocurrencies.
Mark Carney had previously stated that cryptocurrencies should be regulated rather than banned altogether.
He now says, however, that compared to legacy debt, digital assets are not a cause for concern, saying:
“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.”
He adds, the FSB “will identify metrics for enhanced monitoring of the financial stability risks” moving forward.
Mr. Carney rounded off his letter by saying he will be “updating the G20 as appropriate,” should usage of those assets continue to grow.