Crypto Now Big Enough To Threaten Financial Stability
Key Takeaways
- BIS flags growing crypto-TradFi links, citing Bitcoin ETFs and tokenization as catalysts.
- Wealth inequality may worsen as retail investors enter during downturns while the rich exit.
- BIS calls for tighter DeFi regulation with KYC, disclosures, and risk frameworks.
The Bank for International Settlements (BIS) has issued a detailed report stating that cryptocurrencies and DeFi have reached a “critical mass,” making them potential contributors to financial instability.
Once considered niche and disconnected from traditional finance (TradFi), the evolving crypto landscape is now creating deeper integration with the broader financial system, particularly through the introduction of spot Bitcoin ETFs and…
