Financial Stability on The Brink of Instability Due to Bigtech Companies
With cryptocurrencies on the rise, the Financial Stability Board suggests governments and regulators to thoroughly monitor the rising trends of BigTech companies developing crypto payment and digital money transmission markets.
A recent report published that the FSB spoke on the increase in monitoring BigTech’s involvement in the financial services, as it recognizes its potentiality in terms of higher financial inclusion. Moreover, the concern was mainly with mainstream economic infrastructures being in cessation if the participation of companies like Facebook partakes in crypto payments and electronic transfers.
FSB’s primary concern relates to major tech companies whose large user groups may disintegrate banks, should they become leaders in the payments market. A report reads, “Where stored value payment products (e.g., mobile wallets) become prominent; a relatively large and potentially mobile pool of funds may be controlled outside the banking system (though often these funds are ultimately deposited with banks). Furthermore, the greater mobility of this pool of funds compared with the customer deposits may also reduce the stability of bank funding.”
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