Author: Gan Jia Ci
According to a report published by the Central Bank of Russia on 30 May, crypto-assets are not deemed as threats to the global financial stability. The bank claims that the global volume of cryptocurrency transactions is still relatively mediocre.
Rather than classifying the assets as a form of “cryptocurrency”, the Financial Stability Board introduces the name “crypto-asset” instead, the latter being a financial asset based on the cryptographic application and distributed ledger technology.
As compared to the scale of the global financial system, the report stated that the current volume of crypto-asset transactions is still relatively low. This aspect is almost negligible as compared to the financial system.
However, crypto-assets could pose as a risk to a number of factors affecting financial stability – market growth, large-scale involvement of investment from retailers and institutions, banks and more. The high volatility of prices is what keeps these crypto-assets from being a credible standard of value, store of value and a means of exchange.
Investing in crypto-assets also brings about numerous hazards, such as the lack of protection of investor rights, risks in preventing money laundering and terrorism financing, market illiquidity and more.
On 22 May, Russia’s Parliament the State Duma accepted the first reading of new constitution on crypto industry regulation.
The report stated,
“These specifications determine that both cryptocurrency and tokens constitute property, identifying key differences between cryptocurrency and tokens on the basis that there is a single issuer (for tokens) or a variety of issuers/ miners (for cryptocurrency), as well as emission goals.”