FSB warns of crypto threat to financial stability

finextra.com:

The study highlights a number of vulnerabilities associated with crypto-asset markets. These include increasing linkages with the regulated financial system; liquidity mismatch, credit and operational risks that make stablecoins susceptible to sudden and disruptive runs on their reserves, with the potential to spill over to short-term funding markets; the increased use of leverage in investment strategies; concentration risk of trading platforms; and the opacity and lack of regulatory oversight of the sector.

The report also notes wider public policy concerns related to crypto-assets, such as low levels of investor and consumer understanding, money laundering, cyber-crime and ransomware. The FSB warns that financial stability risks could escalate rapidly and calls for timely and pre-emptive evaluation of possible policy responses.