Financial Stability Oversight Council - FSOC Declares That Cryptocurrencies Are Not a Threat to the Financial System

FSOC Declares That Cryptocurrencies Are Not a Threat to the Financial System

Even when for the Deutsche Bank and other investors, a Bitcoin Crash is in the top 20 threats for the the markets in 2018, for other important regulators it is not. That is the case of the Financial Stability Oversight Council (FSOC). It claims that Bitcoin and other cryptocurrencies are not a threat for the financial markets around the world.

Is it Risky or Not?

There is not a single answer for this question. We are able to say that it depends according to who says it. As regards FSCO’s report, cryptocurrencies do not pose a real threat to the financial system. The statement reads as follows:

“Virtual currencies are only used by a very small number of consumers. We give a bit more credit to the potentially much roader applications of the so called distributed ledger technology underpinning innovations. It is noteworthy that this digital wave also presents a regulatory challenge, because the storage of data is decentralized, rather than being in one spot that governments can watch.”

The comments and the report arrive when the markets are being legitimized by mainstream financial institutions. The Chicago mercantile Exchange (CME) will start to offer Bitcoin futures tomorrow, and the Chicago Board Options Exchange (CBOE) does it since one week. Bitcoin is receiving a big support from these institutions. Besides that, smaller investors and individuals are starting to invest in Bitcoin and other cryptocurrencies.

Coinbase, one of the most important bitcoin and cryptocurrency exchanges available is receiving more than 100,000 new users per day. Other exchanges are also receiving more and more clients. The mainstream media has been covering Bitcoin and other virtual currencies in a deeper way, creating a bigger interest in these assets.

But for other investors, bankers and institutions, these currencies can create several problems to the economy and the financial world. For the Deutsche Bank a Bitcoin crash would have a worse effect in the world than a war with North Korea.

This year, the cryptocurrency market had an incredible performance and in 2018 it seems that it will keep growing. Investors are starting to see it as a way to make profits and to use the technology that these currencies offer.