Bankruptcy of crypto-asset companies with multiple businesses is not a major threat to the real economy: Financial Stability Board | CoinDesk JAPAN

According to a report released by the Financial Stability Board (FSB) on November 28th, the bankruptcy of crypto-asset companies with multiple activities does not pose a major threat to the “real economy.”

The FSB report also states that further assessment is needed as “significant information gaps remain”.

The FSB, which oversees the financial system and proposes rules to help prevent financial crises, announced in July that it would assess the impact of multifunctional crypto asset intermediaries (MCIs) on financial stability. According to the FSB, an MCI refers to an individual company or a group of related companies that combine a wide range of services, products and functions, with a focus on operating trading platforms. This could include a number of crypto-related companies such as Coinbase and Binance.

The FSB believes that crypto-asset companies that combine a variety of activities are more vulnerable to failure and that mitigating the impact of such failures depends on how well global crypto-asset regulation is implemented. I warned you that it was on. The report also identified a “digital divide” that requires enhanced cross-border cooperation and information sharing.

The report states that there is no significant difference in the vulnerability of companies in MCI and traditional finance. However, MCI’s vulnerabilities increase when it engages in proprietary trading, market making on its own exchanges, and lending and borrowing.

The FSB said it would need to assess whether MCI’s disclosure and reporting requirements are sufficiently covered or whether additional measures are needed.

“MCI’s activities, which combine functions that would normally be restricted or separated in traditional finance, appear to be unilaterally inconsistent with the principle of ‘same activities, same risks, same regulations,'” the report said. ing.

｜Translation: CoinDesk JAPAN
｜Edited by: Toshihiko Inoue
｜Image: Shutterstock
｜Original text: Failure of Multi-Function Crypto Firms a Limited Threat to ‘Real Economy’: FSB