Template-Type: ReDIF-Paper 1.0
Author-Name: Matteo Aquilina
Author-X-Name-First: Matteo
Author-X-Name-Last: Aquilina
Author-Name: Jon Frost
Author-X-Name-First: Jon 
Author-X-Name-Last: Frost
Author-Name: Andreas Schrimpf
Author-X-Name-First: Andreas
Author-X-Name-Last: Schrimpf
Title: Addressing the risks in crypto: laying out the options
Abstract: The recent high-profile failures of FTX and other crypto firms have re-ignited the debate on the appropriate policy response to address the risks in crypto, including through regulation. 
The "shadow financial" functions enabled by crypto markets share many of the vulnerabilities of traditional finance. These risks are exacerbated by specific features of crypto. 
Authorities may consider different – not mutually exclusive – lines of action to tackle the risks in crypto. These include containment or regulation of the crypto sector or an outright ban. 
Central banks and public authorities could also work to make TradFi more attractive. A key option is to encourage sound innovation with central bank digital currencies (CBDCs).
Length: 9 pages
Creation-Date: 2023-01-12
File-URL: https://www.bis.org/publ/bisbull66.pdf
File-Format: Application/pdf
File-Function: Full PDF document
File-URL: https://www.bis.org/publ/bisbull66.htm
File-Format: text/html
Number: 66
Handle: RePEc:bis:bisblt:66