Regulator unveils plan to monitor cryptocurrency threat

A Bitcoin (virtual currency) coin is seen in an illustration picture taken at La Maison du Bitcoin in Paris, France, June 23, 2017. (File photo: Reuters)
Updated 16 July 2018
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Regulator unveils plan to monitor cryptocurrency threat

  • “Monitoring the size and growth of crypto-asset markets is critical.." FSB says
  • Plan follows drive by central banks and regulatory bodies to keep cryptocurrencies at bay

GENEVA: A financial regulator on Monday unveiled a strategy to monitor whether cryptocurrencies such as Bitcoin pose a threat to world economic stability.
The plan follows on from a concerted drive by central banks and regulatory bodies to keep cryptocurrencies at bay.
In a statement, the Financial Stability Board (FSB), which oversees regulation among G20 economies, said it believes “crypto-assets do not pose a material risk to global financial stability at this time.”
But, the FSB added, the speed at which cryptocurrencies are spreading, the lack of solid data on their use and uncertainty over which rules apply in the sector should spur major economies to redouble their scrutiny.
“Monitoring the size and growth of crypto-asset markets is critical to understanding the potential size of wealth effects, should valuations fall,” the FSB said.
The framework also calls of an examination of whether cryptocurrencies are evolving from a method of paying for goods and services into a securities product, which individuals are holdings as a savings device instead of a stock or a bond.
The FSB also underscored “the scarcity of reliable data on banks’ holdings of crypto-assets.”
That point serves as a chilling reminder of the 2008 financial crisis, which was made worse by the fact that some banks did not know their level of exposure to securities backed by junk mortgages, even after those mortgages started to fail.
The FSB said an affiliate called the Basel Committee on Banking Supervision was “conducting an initial stocktake on the materiality of banks’ direct and indirect exposures to crypto-assets.”
It warned that the exposure of financial institutions to cryptocurrencies will serve as a key measurement of the “risks to the broader financial system.”
The FSB said it expects its plan will face hurdles from the outset, given the “data gaps” and “lack of transparency” in the sector, especially concerning the individuals trading coins on a daily basis.
The FSB, currently chaired by Bank of England chief Mark Carney, said it will formally present the framework to G20 finance ministers when they meet in Buenos Aires later this month.
The call for tighter monitoring follows major swings in the value of assets like Bitcoin and the constant emergence of new cryptocurrencies, which has raised fears that the unregulated and opaque market could pose a rising threat to investors.


Libya’s National Oil against paying ‘ransom’ to reopen El Sharara field

Updated 14 December 2018
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Libya’s National Oil against paying ‘ransom’ to reopen El Sharara field

  • Ransom payment would set dangerous precedent
  • NOC declared force majeure on exports on Monday

BENGHAZI: Libya’s state-owned National Oil Corp. (NOC) said it was against paying a ransom to an armed group that has halted crude production at the country’s largest oilfield.
“Any attempt to pay a ransom to the armed militia which shut down El Sharara (oilfield) would set a dangerous precedent that would threaten the recovery of the Libyan economy,” NOC Chairman Mustafa Sanalla said in a statement on the company’s website.
NOC on Monday declared force majeure on exports from the 315,000-barrels-per-day oilfield after it was seized at the weekend by a local militia group.
The nearby El-Feel oilfield, which uses the same power supply as El Sharara, was still producing normally, a spokesman for NOC said, without giving an output figure. The field usually pumps around 70,000 bpd.
Since 2013 Libya has faced a wave of blockages of oilfields and export terminals by armed groups and civilians trying to press the country’s weak state into concessions.
Officials have tended to end such action by paying off protesters who demand to be added to the public payroll.
At El Sharara, in southern Libya, a mix of state-paid guards, civilians and tribesmen have occupied the field, camping there since Saturday, protesters and oil workers said. The protesters work in shifts, with some going home at night.
NOC has evacuated some staff by plane, engineers at the oilfield said. A number of sub-stations away from the main field have been vacated and equipment removed.
The occupiers are divided, with members of the Petroleum Facilities Guard (PFG) indicating they would end the blockade in return for a quick cash payment, oil workers say. The PFG has demanded more men be added to the public payroll.
The tribesmen have asked for long-term development funds, which might take time.
Libya is run by two competing, weak governments. Armed groups, tribesmen and normal Libyans tend to vent their anger about high inflation and a lack of infrastructure on the NOC, which they see as a cash cow booking billions of dollars in oil and gas revenues annually.