Distributed financial report released

Summary of “benefits and risks” of decentralized financial system

The FSB released its latest report on distributed finance on the 6th and explained the benefits and risks to the stability of the existing financial system.

While giving benefits such as reducing the concentration of financial service providers, he pointed out that mining concentration for approving transactions is a risk.

FSB is an organization that consists of central banks and financial supervisors in major countries.

The following summarizes the benefits and risks that the FSB brings to the diversified financial financial system.

“benefit”

・ There is a possibility to reduce the risk created by existing financial institutions and intermediaries.

For example, increasing and decentralizing financial service providers will reduce the concentration of service providers.

• May facilitate short-term lending.

This may reduce the risk of solvency problems and liquidity.

・ Operational risks may also be reduced.

If properly operated, it may be more resistant to cyber risk than a centrally managed system.

However, this requires that one node (a computer participating in a blockchain network) has no control.

-Quantum computer may be a threat of distributed ledger technology.

“risk”

・ Concentration of power may occur in a new way.

Ownership of assets, control over source code, operation of infrastructure, mining of cryptographic assets, code development, etc. are concentrated to a relatively small number of people (such as software developers).

• It may create greater variability in crediting than existing financial institutions.

・ The location of responsibility becomes unclear.

・ When a problem occurs, system recovery and resolution may take time.

Currently, they leave it to a central administrator whose location and contact details are clear.

Open distributed ledger technology may pose operational risks such as hostile parties approving fraudulent transactions.

The FSB pointed out that “if these risks build up (or interact with one another) and market participants lose confidence in the financial markets, they may increase the risk for financial stability”.

It also explains the possibility of not being able to easily monitor rising risks in parts of the system or the possibility that decentralized finance can not be subject to regulation.

He added that the central bank’s injection of liquidity, etc., could slow the response to the interventions of the authorities due to the stability of the financial system.

Let’s be sensitive to these changes in the financial system.

It may also affect the market price

G20 Lagarde IMF Executive Director

“It’s not bad to make a coin”

Mr. Lagarde, Managing Director of the International Monetary Fund (IMF), gave a keynote speech at the seminar on the G20 Finance Minister’s Central Bank President’s Meeting held from the 8th.

It is not bad that major financial institutions make coins on cryptocurrency,

However, he pointed out that privacy issues become a concern of the financial system when they become known.

Managing Director Lagarde said that consumer protection and privacy issues had surfaced, and needed to think about whether investors could be given information that they felt secure.

G20 has not reached a consensus on the regulation.

There is also the problem of market concentration.

China’s financial industry gained a lot of access and gave birth to employment.

However, only two companies have monopolized the market, and this is a problem, “he said, with a view to financial stability, he wanted to secure the financial system and consumer security without losing innovation.

The positive remarks about virtual currency by the Managing Director of International Monetary Fund (IMF) Lagarde are likely to lead to a big boost.

■■

Our information links.

HP

https://amanpuri.io/tokensale/

Telegram

https://t.me/amanpurichat

Twitter

https://twitter.com/amanpuri_ex

Facebook

https://www.facebook.com/amanpuriexchange/

Bitcointalk

https://bitcointalk.org/index.php?topic=5116010