 Tackling the risks in crypto: Choosing among bans, containment and regulationMatteo Aquilina, Jon Frost and Andreas Schrimpf Journal of the Japanese and International Economies, 2024, vol. 71, issue C Abstract: The high-profile failures of a number of crypto firms have re-ignited the debate on the appropriate policy response to address the risks in crypto. The “shadow financial” functions enabled by crypto markets share many of the vulnerabilities of traditional finance and risks are often exacerbated by specific features of crypto. Authorities may consider different, and not mutually exclusive, lines of action to tackle the risks in crypto. These include (i) bans, which could tackle specific aspects of the crypto ecosystem, (ii) containment so that the real economy is insulated from crypto risks, and (iii) the regulation of the crypto sector. The paper highlights the pros and cons of the different approaches and proposes a framework to choose when bans, containment and regulation are most appropriate. It also describes the approach taken in Japan, which has been a pioneer in tacking such risks. With each approach, central banks and public authorities can also work to make traditional financial more attractive, thereby allowing responsible innovation to thrive. Keywords: Crypto-assets; Blockchain; Distributed ledger technology; Regulation (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jjieco:v:71:y:2024:i:c:s0889158323000412 DOI: 10.1016/j.jjie.2023.101286 Access Statistics for this article Journal of the Japanese and International Economies is currently edited by Takeo Hoshi More articles in Journal of the Japanese and International Economies from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.