FSB: "Proliferation of Stablecoins and ETFs... Growing Risk of Virtual Assets Shaking Traditional Finance"
Summary
- The Financial Stability Board (FSB) has warned that the proliferation of virtual assets through stablecoins and exchange-traded funds (ETFs) is deepening their ties with the traditional financial system.
- The FSB chair especially highlighted the potential risk transfer between traditional finance and virtual assets, noting that stablecoin issuers hold large amounts of U.S. Treasury bonds.
- With the launch of virtual asset ETFs, it has become easier for retail investors to enter the market, which is speeding up the spread of virtual assets.
The Financial Stability Board (FSB) has warned that virtual assets (cryptocurrencies) are becoming increasingly intertwined with the traditional financial system through stablecoins and exchange-traded funds (ETFs), amplifying associated risks.
According to Cointelegraph, a media outlet specializing in virtual assets, Klaas Knot, chair of the FSB, stated at an event in Madrid, Spain on the 13th (local time), "While virtual assets are not yet a major threat to the entire financial system, they could soon become one," adding, "We are approaching a tipping point where risks could surge rapidly."
He particularly pointed out that stablecoin issuers hold large quantities of U.S. government bonds. He explained, "If such assets connect with traditional finance, issues on the virtual asset side could impact the entire financial system."
He further added, "The launch of virtual asset ETFs has made it easier for retail investors to enter the market, accelerating the spread of virtual assets."
Minseung Kang
minriver@bloomingbit.ioBlockchain journalist | Writer of Trade Now & Altcoin Now, must-read content for investors.
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