Crypto-asset markets: structure, stress episodes in 2022 and policy considerations

Giorgio Abate (), Nicola Branzoli and Raffaele Gallo
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Giorgio Abate: Bank of Italy

No 783, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: This paper provides a conceptual framework to analyse risks and vulnerabilities in crypto-asset markets and describes the episodes of stress observed in these markets in 2022. The analysis is used to provide preliminary policy considerations that are relevant for financial stability. We highlight the importance of setting a clear perimeter for financial regulation and of developing global rules to address financial stability risks in the areas covered by financial regulation following the principle "same risk, same regulatory outcome". Authorities could discourage and monitor exposures of supervised or overseen operators to areas not directly covered by financial regulation while trying to incentive the adoption of safe and sound risk management practices by entities involved or operating in these areas. Finally, we provide concrete proposals to implement these considerations.

Keywords: cryptoassets; financial stability; stablecoin; decentralized finance; leverage; investor run (search for similar items in EconPapers)
JEL-codes: G0 G1 G18 (search for similar items in EconPapers)
Date: 2023-06
New Economics Papers: this item is included in nep-fmk and nep-pay
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