Crypto's scale, structural vulnerabilities and increasing interconnectedness with traditional finance could threaten global financial stability, according to a new FinStbBoard report. By iamsandali
“Nevertheless, institutional involvement in crypto-asset markets, both as investors and service providers, has grown over the last year, albeit from a low base,” the report said. “If the current trajectory of growth in scale and interconnectedness of crypto-assets to these institutions were to continue, this could have implications for global financial stability."the $133 billion global stablecoin market was still too small to be considered as a mainstream payment method.
“Were a major stablecoin to fail, it is possible that liquidity within the broader crypto-asset ecosystem could become constrained, disrupting trading and potentially causing stress in those markets. This could also spill over to short-term funding markets if stablecoin reserve holdings were liquidated in a disorderly fashion.”
The report did not provide any recommendations other than stating the need to preemptively consider policy options for regulating the sector.
France Dernières Nouvelles, France Actualités
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