BIS explores stability risks of DeFi, crypto as they reach “critical mass” – Ledger Insights
The week the BIS, the central bank of central banks, released a paper exploring the financial stability risks of cryptocurrencies and decentralized finance (DeFi). While this is a topic that has been covered many times, including by some of the same authors a couple of years ago, the paper is articulate and fresh. Most central bankers have argued that cryptocurrency is too small and self-contained therefore does not yet present a financial stability risk. This report states that the crypto market has “reached critical mass”, although it still considers it as having minimal linkages to traditional finance (TradFi). However, the issuance of Bitcoin ETFs and the expansion of stablecoins and real world asset (RWA) tokenization are…
