Cryptocurrencies do not threaten the financial world order, says FSOC

Most traditional financial institutions have declared a Bitcoin Crash as one of the top 20 possible financial threats in 2018, however, the regulatory body FSOC argues otherwise.
Several prominent financial institutions all over the world, including the Deutsche Bank, have declared that a bitcoin crash is one of the primary threats to financial markets. However, some regulators disagree. According to the Financial Stability Oversight Council (FSOC), bitcoin and other altcoins do not pose any significant threat to the current financial landscape.

The question is complex, with valid arguments on both sides. However, in their recent report, the FSOC argues that digital currencies are a niche product used by a relatively small portion of the world’s population. The FSOC continues to state that, due to the cryptocurrency’s lack of utility, it has little credit. However, the FSOC does recognize the value in the underlying blockchain technology. In addition, the report notes that cryptocurrency has proved to be a regulatory headache, due to the decentralized nature. This makes the industry difficult to monitor and regulate.

The FSOC released their report as two of the world’s largest traditional institutional trading platforms launched bitcoin futures contracts. The Chicago Board Options Exchange (Cboe) launched their bitcoin futures contracts last week, while the Chicago Mercantile Exchange (CME), launched their’s yesterday. This move has validated bitcoin in the mainstream financial industry, which in turn, has encouraged mainstream and institutional investors to participate.

In addition, the major bitcoin exchange platform, Coinbase, continues to receive 100,000 new user registrations every single day. Other crypto exchange platforms are also growing in their user base more quickly than originally expected. Ever since bitcoin’s rise in the last year, media outlets have been focused on this strange new phenomenon and people have become obsessed with this age’s digital gold rush.

However, the cryptocurrency’s growing popularity could prove a nightmare to traditional financial institutions, including banks, institutional investors, and credit services providers. According to the Deutsche Bank, a bitcoin crash is a more damaging threat to the economic landscape than a possible war with North Korea.

This last year has been a watershed one for the cryptocurrency industry and promises to continue its staggering growth in 2018. More and more investors are starting to participate in the market and the mainstream economic sphere is finally accepting bitcoin into their inner circle.