Standard & Poor’s (S&P) Global Ratings released a report on February the 19th in which they express that virtual currencies will need some rules if they want to change the game. The title of the report reads: “The Future Of Banking: Cryptocurrencies Will Need Some Rules To Change The Game.”
S&P Global Ratings Report
According to the S&P report, in an event of a cryptocurrency crash, retail investors would be the most affected. At the same time, banks would be insulated against a crisis in the cryptocurrency world.
“For now, a meaningful drop in cryptocurrencies’ market value would be just a ripple across the financial services industry, still too small to disturb stability or affect the creditworthiness of banks we rate,” commented Mohamed Damak, S&P Global Rating financial services senior director.
The report says:
“We expect rated banks to be largely insulated, given that their direct or indirect exposure to cryptocurrencies appear to remain limited.”
Damak has also expressed that the future of cryptocurrencies will depend on the approach of global regulators and policy makers to create confidence in these instruments. About blockchain the report has a very positive outlook. It says that blockchain technology could lead to a “positive” disruption of the global financial markets.
Cryptocurrencies and Blockchain Technology Expanding
Cryptocurrencies and Blockchain technology are expanding all over the world. More enterprises and institutions are using these technologies in order to improve their services and products. While Blockchain technology is seen as positive by regulators, cryptocurrencies are arising concerns in some countries.
At the moment there are some countries where cryptocurrencies have been irrupting. Japan has benefited from having a very active cryptocurrency community. Its GDP has grown 0.3% solely because of cryptocurrency profits.
Belarus, Switzerland and Slovenia are taking welcoming approaches to Blockchain investments and cryptocurrency. Indeed, in Belarus, the government has legalized the used of cryptocurrencies and they are considered legal tender.
Switzerland has already expressed its intention to become a cryptocurrency nation. The State Secretary at the Swiss Finance Ministry said:
“We think there is huge potential [in Cryptocurrencies] but the market is not as disciplined as we want. We want it [the Initial Coin Offering market] to prosper but without compromising standards or the integrity of our financial markets.”
Important enterprises have been located in Switzerland and several ICOs have been supported by the government. Cryptocurrency miners are also receiving important support from different governments in order to settle their mining farms there.
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