Financial regulators turn watchful eye to cryptocurrency market

The Financial Stability Board wants to see risks early.

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The Financial Stability Board set out its framework for monitoring cryptocurrencies like bitcoin.

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Global financial regulators are now keeping an eye cryptocurrencies like bitcoin, having published their framework for monitoring stability implications within the market.

The framework was established to allow the Financial Stability Board, which helps G20 countries coordinate policy, to catch stability risks early, Reuters noted.

The cryptocurrency sector has sat in a regulatory gray area, with a lack of clarity as to which financial rules apply.

Reuters highlights the volatility of cryptocurrency prices and the fact that startups have begun issuing new digital currencies via initial coin offerings (ICOs) as factors in the FSB getting involved.

Watch this: Sirin Finney blockchain phone secures your bitcoin

"Monitoring the size and growth of crypto-asset markets is critical to understanding the potential size of wealth effects, should valuations fall," the board told Reuters in a statement on Monday. "The use of leverage, and financial institution exposures to crypto-asset markets are important metrics of transmission of crypto-asset risks to the broader financial system."

Last week, Chinese police shut down a World Cup gambling ring that was hosting $1.5 billion in cryptocurrency bets. The bust came after the country banned ICOs last September, saying scams had "seriously disrupted economic and financial order."

However, the market continues to develop elsewhere. CNET checked out the Sirin Finney, one of first blockchain phones, last week. It boasts a hidden pop-up screen for cryptocurrency security.

In June, Facebook started allowing some advertisements for cryptocurrencies, but still prohibits ads promoting options and ICOs.