Cryptocurrency prices have been nothing if not volatile over the span of years. Bitcoin is only the marquee name, but shows enthusiasm for crypto in the wake of a trade war that may (or may not) see the digital coins embraced as a hedge against stocks and bonds. Bitcoin, for example, has rallied in recent months, from a nadir below $4,000 to a recent $8,600.
Yet instances of fraud still abound, with headlines tied to bitcoin mining schemes and even Ponzi schemes.
Against that backdrop, the Financial Stability Board (FSB) and other regulators have eyed risk and how the sector should be regulated. In a recent report titled “Crypto assets: Work underway, regulatory approaches and potential gaps,” which debuted on Friday (May 31) ahead of the June 2019 meeting of the G20 finance and central bank officials, the findings are that “Gaps may arise in cases where such assets are outside the perimeter of market regulators and payment system oversight. To some extent, this may reflect the nature of crypto-assets, which may have been designed to function outside established regulatory frameworks. Gaps may also arise from the absence of international standards or recommendations.”
Assessing the impact of such gaps is challenging, according to the report. But within a variety of ongoing initiatives and areas of research, groups are looking at “high-level supervisory expectations for banks,” and examination of banks’ exposure to crypto assets. The FSB found that “views differ among FSB members on whether an appropriate multilateral response requires more coordination among international organizations and, if so, the priority that should be given to it at the present time.”
Student Loans, Too
Separately, the Government Accountability Office (GAO) has recommended that the Consumer Financial Protection Bureau (CFPB) clarifies which financial institutions can offer private student loan rehabilitation programs. The private loans are in turn offered by banks, but those banks do not have rehabilitation programs, which help scrub defaults from credit reports after some corrective action.
The GAO noted in a statement that such rehabilitative programs “could slightly improve their access to credit. Other financial institutions are also interested in offering these programs, but are not certain of their authority to do so.” The GAO has said the director of CFPB, “after consulting with the prudential regulators and relevant industry groups, should provide written clarification on what information in a consumer’s credit report constitutes a private student loan reported ‘default’ that may be removed after successful completion of a private student loan rehabilitation program.”
Separately, in China, per reports in The Economist, Chinese lawmakers are poised to review potential changes to the nation’s existing corporate bankruptcy law. The publication notes that changes to existing bankruptcy laws may be in the offing, with an eye on smaller businesses and individuals.
“Disreputable [lenders] have required borrowers to surrender the contacts stored on their mobile phones, so family and colleagues can be hassled if payments are missed,” The Economist stated, pointing to other, more humiliating tactics that lenders and collectors have used.