It has taken time, but the news most of us have known for years has now become official. No longer able to deny the power of Bitcoin, the Financial Stability Board (FSB) has stated that Bitcoin and other cryptocurrencies don’t have the power to threaten the global financial system. According to a newly published report – which is a must read in our opinion – the FSB has made a bold declaration by saying that the crypto market “[does] not pose a material risk to global financial stability at this time.”
The FSB’s Surprising Decision
The FSB is made up of members from the G20, which covers the world’s most influential economies. In line with the recent report, the FSB has said that it plans to monitor crypto assets at banks and the world’s leading financial systems. So, it’s clear that the FSB isn’t letting the cryptocurrency matter move forward without close observation. Within the report, it was also revealed that the Basel Committee on Banking Supervision (BCBS) – a key element of the FSB – is compiling member bank data to understand the possible impact that cryptocurrency technology might have on the world’s economies. This isn’t the only positive Bitcoin news emerging from Switzerland either, as the country’s largest stock exchange is moving towards crypto adoption.
Putting Mark Carney on the Back Foot
There are very few individuals within the financial sector that dislike Bitcoin more than Mark Carney. It’s certainly odd that the head of the FSB and current Bank of England Governor is such a huge crypto and Bitcoin sceptic. Especially given that he delivered a letter to central bank governors and G20 finance ministers stating that Bitcoin doesn’t pose a “systemic risk” earlier in the year. We can only imagine how the latest FSB report pains him, with Bitcoin continuing to establish itself as a mainstream financial force. Carney has actually gone from stating that Bitcoin has “all the hallmarks of a bubble” and could result in a “pretty brutal reckoning,” to being the man heading up the FSB as it seemingly softens its feelings on the crypto market.
Carney might continue to say that cryptos are failing in execution and warrant extreme regulation, but that flies in the face of the FSB’s view. Making matters worse for Carney, the Imperial College London – after conducting its own study – declared that cryptocurrencies are prepped and primed for wide-scale adoption.
Moving Towards a Global Standard
The recent FSB report indicates that the world is moving towards a global standard with regards to crypto regulation – just look at what’s happening in Malta. It shows that the cryptocurrency landscape is changing, with the FSB playing a small role, as it’s set to “help to identify and mitigate risks to consumer and investor protection, market integrity, and potentially to financial stability.” Bitcoin’s price has been in freefall in recent months, but the FSB report has managed to half the slide, with Bitcoin’s value jumping to above $7,000 following its release.
BlackRock to Break New Ground
While it’s way too early to speak of Bitcoin returning to its 2017 form, there are positive signs of a revival. Its price was immediately boosted by the FSB report, with news from BlackRock – the world’s biggest asset management company – also helping matters. The firm has announced that it’s now looking to invest in the crypto market, with this news lending further weight to the argument that Bitcoin is ready for mainstream adoption.
Speaking on the company’s decision, Larry Fink (BlackRock CEO) said, “We are looking at it and as I have said in the past, we are very excited about blockchain technology. That is where we are looking at it even in the Aladdin universe with what we are trying to do there so we are looking at blockchain technologies.” He also confirmed that BlackRock is studying the market extensively, “We are studying it and we are looking at how they perform and we are looking at that type of data as we understand it as we think about other products but right now, worldwide I have not heard from one client that needs to be in it right now.”
Can Bitcoin Return to Form?
Bitcoin’s battle with the mainstream financial sector is sure to rumble on, but this recent FSB revelation can only be seen as a good thing. Who knows, given its impact on Bitcoin’s price, it could be the news that helps steady the ship and put Bitcoin back on the path to a long overdue bull run.