On Monday 16 July, the financial watchdog of the world's 20 largest economies (G20), the Financial Stability Board (FSB), submitted its report to the finance ministers and governors of the Central Banks proposing a supervisory framework for the virtual currencies market, ahead of the meeting of the G20 in Buenos Aires on Saturday 21 and Sunday 21 July.
Readers may recall that at its March meeting (see EUROPE 11986), the G20 gave the FSB a mandate to produce this study whilst continuing to monitor the situation and evaluate the grounds for a multilateral response. The subject was included on the agenda by joint request of France and Germany (see EUROPE 11943).
“While the FSB believes that crypto-assets do not pose a material risk to global financial stability at this time, it recognises the need for vigilant monitoring in light of the speed of market developments”, it writes.
The report sets out the parameters which the FSB will use to monitor the virtual currencies markets. It is proposing to work on the basis of data such as prices, transaction volatility and to add to them as the situation develops.
Even so, the FSB acknowledges the challenges of this monitoring process. “The crypto-asset market is rapidly evolving, as are public data sources”, it explains. For various reasons such as the lack of transparency, risks of manipulation or quality of data, it calls for caution concerning these parameters, which may not be suitable for all virtual currencies.
The FSB will also look closely at direct links between traditional market players and blockchain start-ups as well as trading platforms.
In France, the 'Landau' report, published in early July and commissioned by the French Ministry of Finance, calls for no direct regulation of virtual currencies, but instead to trial a licence for trading platforms, first at national and then at European level.
Although the G20 is certainly not expected to decide on a multilateral response next week, it is likely that it will recommend maintaining a certain degree of vigilance.
The report is available at: https://bit.ly/2NkGL19 (Original version in French by Marion Fontana)