On 8 January 2018, the combined market capitalisation of crypto-assets peaked at an estimated $830 billion, of which approximately 35% was attributable to bitcoin. This dropped to just over $210 billion as of 4 October 2018. The rapid price increase in 2017 elicited interest from retail investors and attracted the attention of regulated financial institutions and intermediaries. In addition, a supporting ecosystem is developing, including crypto-asset trading platforms; crypto-asset derivative markets; and crypto-asset funds and trusts (including exchange-traded notes).

On 10 October 2018, the Financial Stability Board (FSB) published Crypto-asset markets: Potential channels for future financial stability implications. The report focuses on private crypto-assets and does not consider proposals for central bank digital currencies or crypto-assets issued by other public sector entities. In addition, it does not cover distributed ledger technology (DLT) in any capacity other than as it relates to crypto-assets.

The report provides the FSB’s view on the potential financial stability implications of crypto-assets, both at present and if they were to become more widely used in the future. It first assess the primary financial stability risks within crypto-assets then potential transmission channels to financial stability. It finishes by describing the main regulatory approaches and communications, including at the international level.

The FSB believes that, based on the available information, crypto-assets do not pose a material risk to global financial stability at this time. However, it does feel that crypto-assets raise several broader policy issues and vigilant monitoring is needed in light of the speed of market developments.