BIS Economists Recommend 3 Crypto Policies for Regulators Worldwide to Adopt

BIS Economists Recommends 3 Policies Regulators Can Adopt in Dealing With Crypto Risks

Economists at the Bank of International Settlements (BIS) have recommended three policies regulators worldwide could adopt in order to deal with the risks posed by cryptocurrencies. “Authorities can now consider a variety of policy approaches and at the same time work to improve the existing monetary system in the public interest,” they advised.

BIS Economists Discuss Crypto Policies

The Bank of International Settlements (BIS) published a bulletin last week titled “Addressing the risks in crypto: laying out the options.”

Authored by BIS economists Matteo Aquilina, Jon Frost, and Andreas Schrimpf, the report discusses the risks associated with cryptocurrencies and the various options available to regulators and central banks for addressing these risks.

The authors outlined “three potential lines of action.” The first is to “ban specific crypto activities.” Another option is to “isolate crypto from tradfi [traditional finance] and the real economy.” The third is to “regulate the sector in a manner akin to tradfi.” However, the report clarifies that the three options are not mutually exclusive and could be “selectively combined to mitigate the risks emanating from crypto activities.”

BIS Economists Recommend 3 Regulatory Policies to Deal With Crypto Risks

While noting that crypto markets “have experienced a remarkable series of booms and busts, often resulting in large losses for investors,” the BIS economists concluded that “these failures have so far not spilled over to the traditional financial system or the real economy.” Nonetheless, they cautioned:

There is no assurance that they will not do so in the future, as defi (decentralized finance) and tradfi become more intertwined.

“Authorities can now consider a variety of policy approaches and at the same time work to improve the existing monetary system in the public interest,” the BIS report concludes.

What do you think about the BIS economists’ crypto-policy recommendations? Let us know in the comments section below.


Share on facebook
Share on twitter
Share on pinterest
Share on linkedin
On Key

Related Posts

Bitcoin Difficulty Surges 4.68%, Taps New All-Time High; Metric Set to Surpass 40 Trillion

The Bitcoin blockchain recorded another difficulty increase on Sunday, Jan. 29, 2023, at block height 774,144. The network’s difficulty increased by 4.68%, from 37.59 trillion to an all-time high of 39.35 trillion. Bitcoin Difficulty Reaches New All-Time High as Mining Gets Tougher Bitcoin’s difficulty reached another all-time high, surpassing the record set two weeks ago,

Market Strategist Warns of ‘Blood’ on February 1 Ahead of Fed Meeting

Stocks, precious metals, and cryptocurrencies rallied during the first month of the year, and market strategists are saying that markets could retract in the near future if the U.S. Federal Reserve keeps hiking rates and maintaining a broader tightening policy. In three days, on Feb. 1, 2023, the Federal Open Market Committee (FOMC) is set