The Financial Stability Board (FSB) says government and regulators should closely monitor the emerging trend of BigTech companies entering the crypto payments and digital money transmission markets.
BigTech Crypto Payments Pivot Could Disintermediate Banks
In a report published on Sunday (December 8, 2019), the FSB called for greater monitoring of BigTech’s involvement in financial services. While acknowledging the potential for greater financial inclusion, the FSB warned that greater participation of companies like Facebook in crypto payments and electronic transfer at large could pose significant risks to the stability of the mainstream financial infrastructure.
For the FSB, the major tech companies with their massive user bases may disintermediate banks if they become participants in the payments market. An excerpt from the 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…