Economics Professor Warns ‘Cryptocurrencies May Contribute to Monetary and Financial Instability’

Cornell University’s professor of economics and former head of the IMF’s China division, Eswar Prasad, has warned that “Cryptocurrencies may contribute to monetary and financial instability.” He added that the risk is amplified if the industry is unregulated and lacks investor protection.

Crypto Presents Financial Stability Concerns, Bank of England Deputy Governor Warns

A senior Bank of England official says that crypto could potentially be a threat to overall financial stability.

Bank of Russia to assess Bitcoin holdings volumes as $36M leave banks

The Bank of Russia remains skeptical on crypto despite the Russian president viewing it as a potential unit of account. The central bank of Russia is trying to evaluate the amount of Bitcoin (BTC) held by local investors amid a massive amount of money not returning to banks following the pandemic-fueled withdrawals.According to Elizaveta Danilova, head of the central bank's financial stability department, the Bank of Russia is polling local cryptocurrency investors to estimate cryptocurrency investment volumes in Russia.“We need to work both on data and raising public awareness about the risks of such investments, which are backed by nothing,” Danilova said in a Reuters interview published on the Bank of Russia’s official website on Oct.

G7 Finance Ministers and Bankers Adopt Guidelines for Central Bank Digital Currencies

Any digital currency issued by a central bank must support financial and monetary stability, finance leaders from G7 member states have insisted.

Bitcoin Could ‘Trigger’ Financial Instability: Bank of England Exec

The deputy governor for financial stability at the Bank of England has issued a stark warning against cryptocurrencies and their risks.

Bank of England’s Deputy Governor Says Crypto Collapse Plausible, Regulators Need to Urgently Establish Rules

Bank of England Deputy Governor Jon Cunliffe says that a collapse in the cryptocurrency market is certainly “plausible,” stating that regulators worldwide need to pursue crypto rules “as a matter of urgency.” While cryptocurrencies do not currently pose a threat to the country’s financial stability, the deputy governor says there are some “very good reasons” […]

BoE deputy gov: Regulators should pursue crypto as a ‘matter of urgency’

The central bank official spoke about the risks that cryptocurrencies and stablecoins may pose when connected to traditional financial systems through individuals, financial institutions, hedge funds and banks. Jon Cunliffe, deputy governor for financial stability at the Bank of England, said the risks of a growing crypto market on the financial system are “relatively limited” at the moment but have the potential to grow very rapidly if regulators do not keep pace.In a speech to the Society for Worldwide Interbank Financial Telecommunication (SWIFT) on Oct.

Check Out FSB's Roadmaps for Stablecoins and CBDCs

The Financial Stability Board (FSB), a think-thank that provides financial policy recommendations to the G20, is looking to fix the “challenges that cross-border payments” experience by “examining” the use of “global stablecoin arrangements” and central bank digital currencies (CBDCs)....Read More: Check Out FSB's Roadmaps for Stablecoins and CBDCs

IMF reiterates more oversight for crypto in latest report on financial stability

The group identified the crypto space at risk from hacking, “lack of transparency around issuance and distribution” of tokens, and operational risks including outages during periods of extreme volatility. The International Monetary Fund’s Financial Stability Board said the growing adoption of cryptocurrencies could potentially increase the risks to the global economy.In its Global Financial Stability Report released on Oct.

Bank of England: Crypto Assets Pose ‘Limited’ Risks to Stability of UK Financial System

The Bank of England says that crypto assets pose “limited” direct risks to the stability of the country’s financial system.

Countries Should Prevent 'Regulatory Arbitrage' for Stablecoins – FSB

ecoin space.The emergence of global stablecoins (GSCs) would pose greater risks to financial stability than existing stablecoins, said the report, and it may also "challenge the comprehensiveness and effectiveness of existing regulatory, supervisory and oversight approaches."The FSB re...

IMF Says Rapid Growth of Bitcoin and Crypto Assets Poses Risks to Consumer Protection and Financial Integrity

The International Monetary Fund (IMF) is issuing a warning to investors that this year’s crypto boom may pose risks to their financial stability.

IMF recommends CBDC and global crypto standards for financial stability

The fresh policies recommended by the IMF aim to curb down the financial risks associated with global crypto adoption.

IMF Warns Crypto Boom Poses New Financial Stability Challenges, Urges Regulators to Step Up

The International Monetary Fund (IMF) warns that the rising popularity of cryptocurrencies poses new challenges to financial stability.

Ripple is helping Bhutan pilot a CBDC

The company claimed its CBDC solution would allow Bhutan's central bank to deploy a digital ngultrum "without compromising financial stability or monetary policy objectives.” The Royal Monetary Authority of Bhutan is partnering with Ripple to pilot a central bank digital currency in the mountainous kingdom.In a Wednesday announcement, Ripple Labs said Bhutan’s central bank would be taking advantage of the company’s private ledger to issue and manage a digital ngultrum.

Cuba's cryptocurrency regulations take effect

Crypto is now a legal method of payment for commercial transactions in the Island nation. Resolution 215 of 2021 issued by the Banco Central de Cuba (BCC) — the country’s central bank — recognizing cryptocurrencies like Bitcoin (BTC) is now in effect.According to Cuba’s official state news agency Prensa Latina, the order became official on Wednesday.With crypto legally recognized by the BCC, Bitcoin and other cryptocurrencies can now be used for commercial transactions and investments in Cuba.As previously reported by Cointelegraph, the central bank first announced plans to recognize and regulate crypto back in late August.Indeed, Resolution 215 of 2021 contains provisions for a licensing regime for crypto exchanges and other virtual asset service providers operating in Cuba.Despite legalizing the use of crypto assets in Cuba, the BCC has warned of the risks associated with cryptocurrencies.According to the BCC, while crypto operates outside of the nation’s banking system, the use of virtual currencies poses significant monetary policy risks and financial stability concerns.Cuba’s central bank also warned of the potential for bad actors to take advantage of the perceived anonymous nature of crypto transactions for illicit transactions.Related: Sept.

Crypto-related money laundering next on China's policy framework

The People's Bank of China, in its Financial Stability Report 2021, had pointed out that its clampdown on virtual currencies was complete. Days after the release of the report, Zhou Xiaochuan, formThe post Crypto-related money laundering next on China's policy framework appeared first on AMBCrypto.

India’s Central Bank RBI Still Has ‘Serious Concerns’ About Cryptocurrency

The governor of the Reserve Bank of India (RBI), Shaktikanta Das, has once again expressed concerns regarding the impact of cryptocurrencies on India’s financial stability.

Crypto Won’t Last Long Without Regulation, Says SEC Boss Gary Gensler

The chairman of the US Securities and Exchange Commission (SEC) says the crypto industry will have to embrace new regulations to stay relevant and survive.  Gary Gensler tells the Financial Times that like other forms of assets, cryptocurrencies should conform with public policies to protect investors, prevent illegal activities and maintain financial stability.

Thailand's central bank outlines safeguards for a future retail CBDC

The results of a new study from the Bank of Thailand point to three key considerations for making sure a retail central bank digital currency doesn't adversely impact financial stability.

IMF Warns Bitcoin and Crypto Assets Pose Substantial Risks to Macro-Financial Stability

The International Monetary Fund (IMF) says that granting crypto assets such as Bitcoin a legal tender status presents a threat to macroeconomic stability.

Bank of England’s Deputy Governor: Cryptocurrencies Aren’t Big Enough to Pose Financial Stability Risk

Bank of England Deputy Governor Jon Cunliffe believes that cryptocurrencies are not big enough to pose financial stability risk.

Forex Shortages Force Nigerian Corporates to Turn to Parallel Market

Nigeria’s ongoing shortage of foreign exchange is forcing corporates and businesses to source this resource on the parallel market, a former official with the Lagos Chamber of Commerce and Industry (LCCI) has said.

UK will hold back action against crypto ‘pockets of exuberance’ for now

The Bank of England's latest Financial Stability Report took stock of the massive increase in crypto prices and trading activity this year. The Bank of England (BoE)'s latest Financial Stability Report, released twice yearly, acknowledges that increased crypto trading action and price volatility in 2021 signals that the sector is harboring “potential pockets of exuberance.”The report notes that the top market cryptos, Bitcoin (BTC) and Ether (ETH), saw a sharp appreciation in value over the 12 months to April 2021 and that their subsequent drop by roughly 50% in May has left them “particularly volatile,” with prices skewed to the downside as of last month.When it comes to the risks all this poses for financial stability, however, the central bank took a relatively sanguine line, noting that spillovers from the 2021 crypto bull run into wider financial markets were limited.

Fed Vice Chair Quarles Says Digital Dollar Could Pose Significant Risks to US Banking System

The Federal Reserve’s vice chairman of supervision and the chair of the Financial Stability Board (FSB), Randal K.

Rwanda Central Bank Joins CBDC Bandwagon After Announcing Digital Currency Research

The National Bank of Rwanda (NBR) has become the latest African central bank to join the digital currency movement after an employee confirmed the institution is studying the possibilities of issuing its own digital currency.

The ECB Warns Financial Stability Risks If Central Banks Fails to Issue Digital Currencies

The European Central Bank (ECB) warns that nations who decide not to issue CBDCs may encounter risks to their monetary autonomy and financial systems.

Executives from China’s Largest Bitcoin Mining Firms Speak About Regulatory Crackdown

During the course of the week, the cryptocurrency community has been focused on China and the country’s Financial Stability Board detailing that it aims to crack down on the bitcoin mining sector.

An Asynchronous and Divergent Recovery May Put Financial Stability at Risk

Source: Adobe/adrian_ilie825 Tobias Adrian is the Financial Counsellor and Director of the International Monetary Fund’s Monetary and Capital Markets Department. _____ After enduring a tumultuous 2020, the global economy is finally emerging from the worst phases of the COVID-19 pandemic, albeit with prospects diverging starkly across regions and countries—and only after a “lost year”

China’s digital yuan is backup to AliPay and WeChat Pay, says official

Alibaba’s Alipay and Tencent’s WeChat Pay reportedly account for 98% of the mobile payment market in China. China’s central bank digital currency, or CBDC, will provide backup for major retail payment services like AliPay and WeChat Pay as its key objective, according to an official at the People’s Bank of China. Mu Changchun, head of the People’s Bank of China’s digital currency research institute, claimed that China’s digital yuan is needed to ensure financial stability in case “something happens” to AliPay or WeChat Pay, the South China Morning Post reports. Speaking at an online panel discussion on Thursday, Mu stated that Alibaba’s Alipay and Tencent’s WeChat Pay account for 98% of the mobile payment market in China, which poses certain risks should they experience any issues. “If something happens to them, financially or technically, that would definitely bring a negative impact to the financial stability of China.

Bitcoin is 'more a substitute for gold than the dollar' — Fed Chair Powell

Jerome Powell reiterates his opinion about Bitcoin as a gold substitute, but a sell-off accompanies his other criticisms. While Bitcoin (BTC) is too volatile to be money and is "backed by nothing," it could be a "substitute for gold," said the chair of the United States Federal Reserve. Speaking at an event hosted by the Bank for International Settlements, or BIS, on Monday, Jerome Powell delivered frank comments in response to a question on cryptocurrency. Powell takes issue with Bitcoin's backing When asked whether he thought Bitcoin and other cryptocurrencies posed a threat to financial stability, Powell wheeled out familiar arguments that have long come from legacy finance figures. "Crypto assets — we call them 'crypto assets' — they're highly volatile — see Bitcoin — and therefore not really useful as a store of value, and they're not backed by anything," he said. "They're more of an asset for speculation, so they're not particularly in use as a means of payment.

The Evidence Is in on Negative Interest Rate Policies

Luis Brandao-Marques is a Senior Economist in the Global Financial Stability Analysis Division in the Monetary and Capital Markets Department of the International Monetary Fund (IMF).

Survey Finds Many Finance Managers Are Not Planning to Hold BTC— Volatility Cited as Key Concern

A new poll of finance managers by Gartner Finance finds that a majority are not planning to hold bitcoin as a corporate asset.

Australia’s Central Bank Says Bitcoin ‘Not Really Money,’ No Risk to Financial Stability

The Reserve Bank's assistant governor for financial systems, Michelle Bullock, said there is "a lot of fuss over bitcoin."

Testnet of Facebook’s Much Vaunted Stablecoin Only Executes 6 Transactions per Second

The Facebook fronted stablecoin, Diem (formerly Libra)’s dismal testnet results undercut the assertion that the digital currency is a threat to global financial stability.

US Treasury Department Warns Regulators of Potential Risks of Digital Assets

The Financial Stability Oversight Council (FSOC) of the US Treasury Department has released its annual report with a crucial warning of digital assets disruption.

Stablecoins Could Threaten Monetary Sovereignty and Financial Stability, Says ECB’s Christine Lagarde

Christine Lagarde, the president of the European Central Bank (ECB), has highlighted that stablecoins could pose a serious threat to monetary sovereignty and financial stability.

ECB Chief Christine Lagarde Downplays Bitcoin’s Risks to Financial Stability, Troubled by Stablecoins

ECB President Christine Lagarde downplays any risks bitcoin and other cryptocurrencies could pose to financial stability and monetary sovereignty.

FSB Report Says Stablecoins Promote Financial Inclusion: Urges Regulators to Tighten Laundering Controls

The Financial Stability Board (FSB) says stablecoins have the potential to enhance the efficiency of the provision of financial services.