Cryptocurrency Prices Rise on Positive G20 Statement

G20 watchdog chair Mark Carney says cryptocurrencies don’t endanger world economies.

by Kalina Tekelieva
19 March • 3 min
In News

The crypto market is back in the green after Mark Carney, chairman of the G20’s financial regulator, claimed digital currencies are no threat to global economies.

On Sunday, the Financial Stability Board (FSB), which co-ordinates regulation for the G20 group of the largest advanced and developing economies, published a letter by chairman Carney, where he stated that:

“The FSB’s initial assessment is that crypto-assets do not pose risks to global financial stability at this time.”

The letter, addressed to central bankers and finance ministers, was published on the eve of the G20 summit in Buenos Aires on Monday and Tuesday.

Reviewing financial stability

Carney, who is also governor of the Bank of England, elaborated that the rapid growth of digital assets had raised concerns among G20 members. Therefore, the FSB initiated a review of the risks to the stability of world economies.

The initial assessment concluded that virtual assets are not a financial stability issue, partly due to their relatively small market value as well as because they are not substitutes for currency. “Even at their recent peak, their combined global market value was less than 1% of global GDP,” the FSB chairman said.

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At the same time, he underlined that the preliminary review “could change if crypto-assets were to become significantly more widely used or interconnected with the core of the regulated financial system”.

Crypto prices on the increase

After six weeks in the red, the crypto market reacted to the positive statement by the watchdog and the prices of almost all virtual currencies are on the increase on Monday. At the time of publication, Bitcoin (BTC) is priced at USD 8 297, up 7.44% for the past 24 hours, according to research site CoinMarketCap. Ethereum (ETH) and Ripple (XRP), the second- and third-biggest digital currencies by market value, had risen by 4.66% and 8.18%, respectively.

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With the G20 summit on Monday and Tuesday and cryptocurrencies being among the key topics, the development of the market will be followed closely by traders.

Halt to new rules

In the context of the boom of virtual currencies in 2017, regulations have been at the center of discussion all over the globe. In February, China banned crypto exchanges. At the end of 2017, South Korea blocked initial coin offerings (ICOs).

Earlier in March, Mark Carney also called for stricter regulation of the crypto world, advocating for holding the “crypto-asset ecosystem to the same standards as the rest of the financial system,” according to a Bloomberg report.

In the FSB letter, however, Carney spoke in favor of redesigning the existent G20 policies, rather than developing new standards. He also said the effects of the agreed reforms should be rigorously evaluated.