Cryptocurrency market rallies on news of Financial Stability Board assessment
After a two-week digital currency beatdown,
Bitcoin – the world’s number-one cryptocurrency – is finally giving investors something to smile about. This, in the wake of a letter that was sent to both finance ministers of G20 nations and heads of central banks. In it, Mark Carney, Chairman of the
Financial Stability Board (FBS), posited that crypto assets are
not a threat to the global economy. Most other major digital currencies followed Bitcoin in recuperating from recent losses.
Carney stated that, “The FSB’s initial assessment is that crypto-assets do not pose risks to global financial stability at this time.” In the letter, Carney went on to note that while cryptocurrencies raise many questions, “the technologies underlying them have the potential to improve the efficiency and inclusiveness of both the financial system and the economy.” The FSB is an international watchdog that makes recommendations about the global financial system.
On the eve of a meeting of Group of 20 finance ministers and central bankers in Buenos Aires, the FSB issued a letter to international finance ministers saying that cryptocurrencies do not pose any near-term systemic risk to the global financial structure. “This is in part because they are small relative to the financial system. Even at their recent peak, their combined global market value was less than 1% of global GDP,” wrote the Canadian-born Carney, who is also governor of the
Bank of England and former head of the
Bank of Canada.
After the release, Bitcoin recovered climbing close to $9,000 after reaching its lowest levels in more than a month yesterday. Bitcoin’s cash price experienced a robust recovery during trading on Monday, up over 12%. The FSB news halted a tumultuous half-month skid for digital assets that have shed a combined $140 billion since the beginning of March.
“G-20 representatives must use this summit to work toward an agreement to adopt common regulations for cryptocurrencies. By doing so, they will position their respective countries on the right side of history,” said Nigel Green, chief executive of deVere Group.
The G-20 report could signal a turning point for the cryptocurrency market as investors call for a global coordinated approach to govern digital currency assets.