Cryptocurrency is of no threat to German’s financial stability, reported the Financial Stability Committee.The overall economy is so huge that it wil absorb the hiccups posed by cryptocurrency.
The study notes high volatility in crypto markets and states that “they lack general acceptance and transaction costs are often relatively high”:
“As the sector is still small and banks, insurers, and funds are barely involved, the stability implications of crypto-tokens have been limited so far, despite high price volatility and sharply increased market capitalization”.
As indicated by the report, cryptographic forms of money are principally theoretical items. The advisory group characterizes them as “crypto-tokens” rather than “monetary standards” on the grounds that in their view, “crypto-tokens” don’t satisfy the three elements of cash. Per the AFS, they don’t fill in as methods for installment in regular day to day existence, a store of significant worth, or a unit of estimation.
While the panel does not consider cryptographic forms of money to be a risk to monetary steadiness, the organization expects to screen promote improvements around there because of the high development rate of “crypto-
“The connection to the traditional financial system could become tighter in the future, for example, if the trading of crypto-token derivatives on recognized stock exchanges, such as Bitcoin futures contracts, establish themselves in the segment. The Committee will, therefore, monitor further developments, but currently sees no reason to intervene for macro-prudential reasons.”
The recent report reiterates statements made in mid-June, when representatives of the German federal government said that cryptocurrencies do not play an important role in the global financial system because the volume of crypto asset transactions is too smal