Economists at the Bank of International Settlements( BIS) have recommended three programs controllers worldwide could adopt in order to deal with the pitfalls posed by cryptocurrencies. “ Authorities can now consider a variety of policy approaches and at the same time work to ameliorate the financial system in the public interest, ” they advised.
BIS Economists bandy Crypto Policies
The Bank of International Settlements( BIS) published a bulletin last week named “ Addressing the pitfalls in crypto laying out the options. ”
Penned by BIS economists Matteo Aquilina, Jon Frost, and Andreas Schrimpf, the report discusses the pitfalls associated with cryptocurrencies and the colorful options available to controllers and central banks for addressing these pitfalls.
The authors outlined “ three implicit lines of action. ” The first is to “ ban specific crypto conditioning. ” Another option is to “ insulate crypto from tradfi( traditional finance) and real frugality. ” The third is to “ regulate the sector in a manner akin to tradfi. “Still, the report clarifies that the three options aren’t mutually exclusive and could be “ widely combined to alleviate the pitfalls expiring from crypto conditioning. ”
While noting that crypto requests “ have endured a remarkable series of thunderclaps and busts, frequently performing in large losses for investors, ” the BIS economists concluded that “ these failures have so far not revealed over to the traditional fiscal system or the real frugality. ” nevertheless, they advised
There’s no assurance that they won’t do so in the future, as defi( decentralized finance) and tradfi become more integrated.
“ Authorities can now consider a variety of policy approaches and at the same time work to ameliorate the financial system in the public interest, ” the BIS report concludes.
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