The Financial Stability Board (FSB), a global financial body funded by the Bank for International Settlements, has released a new report on financial stability risks associated with cryptocurrencies.
The 30-page study published on Wednesday identifies a range of financial risks associated with different types of cryptocurrencies as well as industrial sectors, including private digital assets such as Bitcoin (BTC), stackable currencies such as Tether (USDT) and decentralized finance (Defi). ). .
The report mentions some common risks, such as the potential failure of some cryptocurrencies, which pose a serious threat to the stability of the entire cryptocurrency ecosystem due to the prevailing trading volumes of cryptocurrencies. The FSB also reported the risks associated with the rapid adoption of DeFi and the associated shortage of clearly identifiable intermediaries, which could increase participation from the banking and other sectors.
The FSB also noted the risks associated with data gaps in the crypto industry and warned of a “lack of transparent, consistent and reliable data on cryptocurrency markets and their connections to the underlying financial system.”
“Such data gaps make it difficult to assess the full extent of cryptocurrency use in the financial system,” wrote the FSB, adding that such gaps make it difficult to identify and quantify emerging risks in the cryptocurrency industry.
“The data available on public block chains is borrowed by design,” the agency wrote, because “it is difficult to identify users engaged in cryptographic activities.”
The FSB listed a large number of gaps in the data, including the percentage of households investing in cryptocurrency, the extent of cryptocurrency fraud, disclosure of the banking sector, owners, the number and value of transactions in the payments industry, and others. . “Survey-based accounts cannot be adapted and updated infrequently or irregularly,” the organization said.
The FSB cited data gaps related to DeFi, such as the unknown percentage of retail and enterprise participation, the number of decentralized applications on the blockchain, impact measurement calculations, and others.
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“The borderless nature of cryptocurrencies makes it difficult to get a complete picture of these markets. As a result, there may be significant differences in the number of cryptocurrencies reported by different data sources,” an FSB spokesperson told Cointelegraph. According to the agency, the data gaps in the cryptocurrency market are mainly due to a “lack of standardized reporting requirements and rules or compliance with rules.”
A spokesperson for the FSB told Cointelegraph that they had no information about the development of the Global Standard Cryptographic Reporting tools.