The chairman of the outgoing financial stability council Klaas Knot has warned that Crypto can pose a threat to global financial stability, with reference to growing connections between crypto and traditional finances.
The FSB has long maintained that “crypto is not yet a systemic risk, but recent developments suggest that we may approach a turning point”, Knoop said During it speaks in Madrid on Thursday.
He pointed to the role of Stablecoins when linking the two financial systems. “Stablecoin expenditure, for example, now keeps significant amounts of American treasury. This is a segment that we have to follow closely.”
Retail traders access to Crypto
Knoop also marked rapid growth in crypto access in the retail trade through listed funds.
“Barriers for retail users have fallen considerably, especially with the introduction of crypto ETFs. The mutual connections with the traditional financial system continue to grow,” said Knot.
While he notes that the rise of crypto is partially powered by inefficiencies in cross -border payments, Knoop emphasized the need for the correct regulation. “The crypto ecosystem will continue to evolve – as well as our regulatory frameworks.”
He said that jurisdictions actively develop rules, and that “the recommendations of the FSB offer a common basis. This is especially important in view of the inherent cross -border nature of a crypto.”
Knoop also discussed parallel worries about climate change and the preparedness of the financial sector.
But he ended with the underline of the importance of global coordination in all areas: “Financial stability is an international audience good. Every problem I mentioned today – NBFI, Banking, Crypto, Payments, Climate – they all exceed edges. And so our response must be.”
Knot’s term at the FSB end June 30. Governor of Bank of England, Andrew Bailey, will follow him.
