Assessing Macrofinancial Risks from Crypto Assets
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Summary:
Failures in the crypto space—including the fall of Terra USD and the FTX debacle—have sparked calls for strengthening countries’ policy frameworks for crypto assets, including by enhanced regulation and supervision. How have these heightened concerns about crypto assets been picked up in systemic risk assessment, and what can be done going forward? In this paper, we introduce a conceptual macrofinancial framework to understand and track systemic risks stemming from crypto assets. Specifically, we propose a country-level Crypto-Risk Assessment Matrix (C-RAM) to summarize the main vulnerabilities, useful indicators, potential triggers and potential policy responses related to the crypto sector. We also discuss how experts and officials can weave in specific vulnerabilities stemming from crypto asset activity into their assessment of systemic risk, and how they can provide policy advice and take action to help contain systemic risks when needed.
Series:
Working Paper No. 2023/214
Subject:
Blockchain and DLT Credit risk Currencies Economic sectors Financial regulation and supervision Financial Sector Money Technology Virtual currencies
Frequency:
regular
English
Publication Date:
September 29, 2023
ISBN/ISSN:
9798400255083/1018-5941
Stock No:
WPIEA2023214
Format:
Paper
Pages:
35
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