- A group affiliated with BIS, named the Financial Stability Advisory Board, has published a negative report on cryptocurrencies.
- The group, which includes representatives from central banks of countries like the USA, Canada, Argentina, Brazil, and Mexico, stated that cryptocurrencies decrease financial stability.
- Especially in developing countries with high inflation, cryptocurrencies have led to a further deterioration of financial stability.
The Financial Stability Advisory Board, linked to BIS, has released a report casting cryptocurrencies in a negative light, stating that they undermine financial stability, particularly in developing nations with high inflation rates.
Perception of Cryptocurrencies as a Mirage
The group has observed that the destabilizing effects of cryptocurrencies are most pronounced in developing nations. They argue that the notion of cryptocurrencies as a means to cheapen payment systems is a mirage and a delusion. Consequently, they believe cryptocurrencies should be classified and regulated as ‘risky assets’, just like many other asset groups.
The Growing Urgency for Crypto Regulations
According to the report, not only in developing countries, but also in more developed ones, retail investors are increasingly purchasing cryptocurrencies. This trend underscores the urgent need for crypto regulations. The group insists that the increasing adoption of cryptocurrencies by retail investors is a cause for concern and calls for immediate regulatory measures.
The Role of BIS in Financial Stability
Established in 1930 and known as the “central bank of central banks”, BIS claims to facilitate international payments and ensure financial stability. However, it does not hold authority over any government or central bank. Despite its lack of direct authority, BIS plays a significant role in the global financial landscape and its views on cryptocurrencies are noteworthy.
Conclusion
In conclusion, the Financial Stability Advisory Board’s report underscores the perceived risks associated with cryptocurrencies. Particularly in developing nations, the group believes that cryptocurrencies are contributing to financial instability. The report calls for urgent regulatory measures to mitigate these risks and classifies cryptocurrencies as ‘risky assets’. The views of this influential group could potentially shape future regulatory approaches to cryptocurrencies.
