Global central banks' FSB releases annual report, continues to assess opportunities and risks associated with digital currencies (full report download)

The Financial Stability Board (FSB), an international body of central bank officials and financial regulators, said in its latest annual report (download the full report) that it will continue to assess the opportunities and risks associated with digital currencies.

The report, published earlier this week, shows that the work being done by the FSB is largely consistent with previous statements by the organization. In March, the group said it was actively discussing digital currency technology and its impact on the financial system.

“The FSB’s ongoing work in this area will consider the risks and opportunities arising from developments in financial technologies, the issues these technologies raise for public authorities, possible steps to address potential risks, opportunities for collaboration across the FSB, and opportunities for deepening analysis and developing supervisory perspectives with standard-setting bodies,” the report said.

The FSB revealed its work in this area earlier this year, when Reserve Bank of India Deputy Governor Subhash Sheoratan Mundra provided details in a speech in February.

The current FSB chair is Mark Carney, the governor of the Bank of England and former governor of the Bank of Canada. Carney detailed the central bank’s work on blockchain technology in a statement earlier this month.

About FSB

In the context of the global financial crisis in 2008, the G20 summit in London decided in early April 2009 to establish a global financial regulatory system. The Financial Stability Board (FSB) came into being under this background. Experts called it the "global central bank". On June 27, 2009, this "global central bank" established in accordance with the resolution of the G20 summit officially began operations. The London Financial Summit decided to establish a new Financial Stability Board to replace the Financial Stability Forum. The new institution has expanded its subordinate institutions and more extensive functions, and will undertake the important task of transforming the global financial regulatory system. The inaugural meeting of the Financial Stability Board was held in Basel, Switzerland from June 26 to 27, 2009.

The specific functions of the Financial Stability Board include: assessing the vulnerabilities of the global financial system and supervising the improvement actions of various countries; promoting cooperation and information exchange among regulatory agencies of various countries, and providing advice on regulatory policies and standards of various countries; coordinating the work of international standard-setting bodies; and formulating emergency plans for cross-border risk management.

To perform these functions, the Financial Stability Board has set up a plenary meeting and a steering committee, as well as three standing committees: the Vulnerability Assessment Committee, the Regulatory and Management Cooperation Committee, and the Standards Implementation Committee. In addition, the Financial Stability Board has set up a working group to promote the implementation of cross-border risk management.

The Financial Stability Board's member institutions include central banks, finance ministries and regulatory agencies of more than 20 countries, as well as major international financial institutions and professional committees. China's Ministry of Finance, the People's Bank of China, the China Banking Regulatory Commission and the Hong Kong Monetary Authority are all members of the committee.