The FSB wants more data to measure the risks of Bitcoin, stablecoins, DeFi
The Financial Stability Board (FSB), a global financial authority funded by the Bank for International Settlements, has released a new report on the financial stability risks associated with cryptocurrencies.
Released on Wednesday, the 30-page study details a number of financial risks related to various types of cryptocurrencies as well as industry sectors, including private digital assets like Bitcoin (BTC), stablecoins like Tether (USDT) and decentralized finance (DeFi).
The report refers to some commonly cited risks, such as a potential failure of certain stablecoins, which poses a significant threat to the stability of the entire crypto ecosystem due to the dominant stablecoin trading volumes. The FSB also flagged risks related to the rapid adoption of DeFi and the associated lack of clearly identifiable intermediaries, the potential increase in involvement from the banking industry and others.
The FSB also highlighted the risks stemming from data gaps in the crypto industry, warning of the “lack of transparent, consistent and reliable data on crypto-asset markets and their links to the basic financial system. “.
“These data gaps make it difficult to assess the full extent of the use of crypto assets in the financial system,” the FSB wrote, adding that these gaps significantly impede the ability to identify and quantify risks. arising from the crypto industry.
“Data available on public blockchains is pseudonymous by design” because it is “difficult to determine the identity of users engaged in crypto-asset activity,” the authority wrote.
The FSB has listed a slew of data gaps, including the share of households invested in crypto-assets, crypto-fraud volumes, banking sector exposure, owners, number and value of transactions in the payment sector and others. “Survey-based metrics are not customizable and update infrequently or irregularly,” the organization noted.
The FSB referred to data gaps related to DeFi, such as the unknown share of retail versus institutional participation, the number of decentralized applications on a blockchain, metrics to measure the effect of lever and others.
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“The borderless nature of crypto-assets makes it difficult to get a complete picture of these markets. As a result, there can be big differences in the crypto asset numbers reported by various data sources,” a carrier said. FSB speaks to Cointelegraph According to the authority, data gaps in the crypto market are primarily due to “lack of standardized reporting requirements and regulation or regulatory compliance.”
An FSB representative told Cointelegraph that he had no information on the development of globally standardized crypto reporting tools.