The explosive growth of cryptocurrencies in the past couple of months has grabbed the attention regulators all across the globe.

While some financial regulators see these emerging asset class as a potential threat to the financial stability, others believe that the volume of cryptocurrency transactions is too low at the moment to have any significant impact.

Global credit ratings agency S&P believes that some regulation and guidance is needed before cryptocurrencies could have a major impact on financial markets. In a recent report, it said that “the characteristics of a cryptocurrency, in its current version, make it more like a speculative instrument that, if its market value were to collapse, would not disrupt global financial stability.”

In the event of a collapse in cryptocurrencies' market value, retail investors would be the first to be affected. With limited exposure to cryptocurrencies, rated banks are expected to remain largely unaffected in such circumstances, according to S&P. However, if cryptocurrencies become an asset class, the impact on financial services firms will be more gradual.

"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," said Dr. Mohamed Damak, S&P Global Ratings Financial Institutions Sector Lead. "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.”