The Financial Stability Board (FSB) have recently stated they want to look into possible volatility threats posed by the likes of Bitcoin.
The Switzerland-based Financial Stability Board stated on Monday that the digital currencies have raised concerns regarding the protection of users and the investors
since there it little known about banks exposure to them.
The FSB deal with the coordination of financial regulations for twenty economies and have said that they want to look into how the risks from virtual currencies, such as Bitcoin
, could spread to other sections of the âfinancial systemâ.
The aim is to include follow the size of the sector to understand in more depth as to the potential financial impact it could have on investors who invest big amounts of money.
A delicate industry
The FSB said:
âMonitoring the size and growth of crypto-asset markets is critical to understanding the potential size of wealth effects, should valuations fall.â
They then went on to say:
âThe use of leverage, and financial institution exposures to crypto-asset markets are important metrics of transmission of crypto-asset risks to the broader financial system.â
The board published their findings to the G20âs finance ministers and heads of banks who will meet on the 21-22 July in Buenos Aires, Argentina.
Considering there is a rare amount of trustworthy information on the banksâ holdings of crypto assets, the Basel Committee on Banking Supervision is taking control of an âinitial stocktakeâ of the banks direct and indirect exposure to potential losses.
This is following the march compromise by members of G20, some of which wanted closer supervision, while others would have preferred more freedom in the matter.
The framework includes the numbers of trading, pricing, margining and clearing for devices that linked to crypto such as the Bitcoin futures presented by the CME Group back in December last year.
The board said that there were regulatory issues surrounding cryptocurrency
include money laundering and the integrity of the market.
Mark Carney, the Governor to the Bank of England, has suggested that the threat of virtual currencies is small because of the low amount that are traded when comparing it to the overall financial system.