S&P Global Ratings: Crypto Needs ‘Some Rules’ For ‘Future Success’
S&P Global Ratings released a report Monday, Feb. 19, entitled the “The Future Of Banking: Cryptocurrencies Will Need Some Rules To Change The Game,” that details the possible outcomes for the global financial markets in relation to the actions of the crypto markets.
Even though an early February crash of both the traditional markets and the crypto markets appeared to show synchronicity, Mohamed Damak, S&P Global Ratings financial services senior director, doesn’t see this correlation as meaningful, CNBC reports:
"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.”
According to S&P’s report, retail investors, as opposed to banks, would be hit the hardest in the event of a crypto crash:
"We expect rated banks to be largely insulated, given that their direct or indirect exposure to cryptocurrencies appears to remain limited."
Damak also stressed the importance of regulation in the crypto sphere moving forward:
"We believe that the future success of cryptocurrencies will largely depend on the coordinated approach of global regulators and policymakers to regulate and enhance market participants' confidence in these instruments.”
The report noted that Blockchain technology could lead to a “positive” disruption of the global financial markets.
Large companies across the globe are already beginning to experiment with Blockchain -- Chinese PC company Lenovo recently filed a patent for a Blockchain-based document verification system, and the first major agricultural trade using Blockchain technology was completed in January by sending a shipment of soybeans from America to China.