The chair of an obscure international committee governing global finance is speaking out about how cryptocurrencies may affect international efforts to evolve finance.
Brand-new reports today at Cointelegraph show that remarks earlier this week by Financial Stability Board chairman Randal Quarles indicate that the emergence of blockchain technologies may frustrate efforts to seek a universal set of protocols for money handling.
This news is all the more juicy, given that most people really don’t know that the Financial Stability Board even exists.
The board was established in 2009 after the G20 London Summit and replaces the previous Financial Stability Forum.
Headquartered in Basel, Switzerland, the board has a mandate to review potential post-financial crisis reforms and look at vulnerabilities in the financial system, while trying to predict disruptions to global finance.
In comments February 10, Quarles said that the Financial Stability Board “decided to undertake a review of its framework for assessing vulnerabilities to ensure that we are at the cutting edge of financial stability vulnerability assessment.”
However, reporter Adrian Zmudzinski writing today also cites institutional materials as stating that “developments like the emergence of crypto assets may challenge any framework.”
Why is this important?
It’s interesting because it goes right to the heart of the big debate around cryptocurrencies. If you are trading cryptocurrency, you should know that there is a very vibrant discussion about whether coins are in general the poison or the cure – whether or not the transparency and decentralization of finance will lead to better outcomes or worse ones. It’s a double edged sword, many economists say, in that the decentralized model can lead to various kinds of fraud and abuse, while also allowing companies to guard against other forms of fraud encryption.
The outcome of investigations into blockchain utility will rule on a lot of this – if regulators can see a pathway toward using blockchain responsibly, that’s going to fuel the popular idea of 2019 as the “year of the crypto” – on the other hand, if they can’t, offices like the FSB will put up roadblocks. Then the question will be – which force wins out?
Keep an eye on these regulatory developments as 2019 rolls on.