Assessing Macrofinancial Risks from Crypto Assets
IMF Working Papers, September 29, 2023
Source details
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- Assessing Macrofinancial Risks from Crypto Assets
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Bibliographic details
- Authors: Burcu Hacibedel, Hector Perez-Saiz
- Published: September 29, 2023
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798400255083.001
Overview
- Authors: Burcu Hacibedel, Hector Perez-Saiz
- Publication date: September 29, 2023
- Paper type: IMF Working Papers, Working Paper No. 2023/214, Issue 214
- Pages: 35
- DOI: https://doi.org/10.5089/9798400255083.001
- Summary of purpose:
- Introduces a conceptual macrofinancial framework to understand and track systemic risks stemming from crypto assets.
- Proposes a country-level Crypto-Risk Assessment Matrix (C-RAM) to summarize main vulnerabilities, useful indicators, potential triggers, and potential policy responses related to the crypto sector.
- Discusses how experts and officials can incorporate crypto-specific vulnerabilities into systemic risk assessment and provide policy advice and take action to help contain systemic risks when needed.
Key findings and framework components
- Failures in the crypto space—explicitly noting the fall of Terra USD and the FTX debacle—have increased calls for strengthened policy frameworks for crypto assets, including enhanced regulation and supervision.
- The paper advances a conceptual macrofinancial framework aimed at:
- Understanding systemic risks that originate from or are amplified by crypto assets.
- Tracking those risks through structured country-level assessment.
- The proposed Crypto-Risk Assessment Matrix (C-RAM):
- Summarizes main vulnerabilities associated with crypto activity.
- Identifies useful indicators for monitoring crypto-related risks.
- Lists potential triggers that could materialize into broader stress.
- Outlines potential policy responses to mitigate or contain systemic repercussions.
Implications for systemic risk assessment and policy action
- Experts and officials are advised to:
- Weave specific vulnerabilities stemming from crypto asset activity into their broader assessment of systemic risk.
- Use the C-RAM as a tool to organize vulnerabilities, indicators, triggers, and policy responses at the country level.
- Provide policy advice and take action, where needed, to help contain systemic risks emerging from the crypto sector.
- Policy emphasis in response to heightened crypto risks includes enhanced regulation and supervision (as stated in the paper’s motivation).
Subjects and keywords (as listed)
- Subjects: Blockchain and DLT, Credit risk, Currencies, Economic sectors, Financial regulation and supervision, Financial sector, Money, Technology, Virtual currencies
- Keywords: analyzing Macrofinancial risk, Blockchain and DLT, country-level Crypto-Risk Assessment Matrix, Credit risk, Crypto assets, Currencies, Financial sector, Global, macro-prudential risk, macrofinancial, micro-prudential risk, price fluctuation, systemic risk, Virtual currencies, vulnerabilities
Publication metadata
- Series: Working Paper No. 2023/214
- Volume: 2023
- Issue: 214
- Stock No: WPIEA2023214
- ISBN: 9798400255083
- ISSN: 1018-5941
Assessing Macrofinancial Risks from Crypto Assets — IMF Working Papers (September 29, 2023) by Burcu Hacibedel and Hector Perez-Saiz — DOI: https://doi.org/10.5089/9798400255083.001
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- Working Paper