The Financial Stability Board publishes a report suggesting that crypto assets could pose significant threats to financial stability across the world.
- In a report posted on Wednesday, the financial body determined “vulnerabilities” in emerging cryptocurrency markets could raise risks of financial instability globally.
- The report studied vulnerabilities within three segments including “unbacked” assets like Bitcoin, stablecoins, DeFi platforms, and other crypto trading platforms.
- The findings of the report pointed to the significant growth of areas such as DeFi and indicated that the global cryptocurrency market cap expanded to $2.6 trillion in 2021.
- The Financial Stability Board warned that if the growth continues, it could have implications for global financial stability.
- The report identified the increasing linkage between crypto and the traditional financial system and pushed focus to stablecoins, indicating that dollar-pegged assets such as USDC and USDT have surged despite regulatory compliance and quality concerns.
The Board cautioned that a stablecoin failure could have a massive negative impact across DeFi.
BTC USD down -2.30%
Source: Crypto Briefing