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Crypto-Asset Markets: Structure, Market Developments in 2022 and Policy Considerations

Author

Listed:
  • Abate, Giorgio

    (Directorate General for Markets and Payments Systems, Bank of Italy, Rome)

  • Branzoli, Nicola

    (Directorate General for Economics, Statistics and Research, Bank of Italy, Rome)

  • Gallo, Raffaele

    (Directorate General for Economics, Statistics and Research, Bank of Italy, Rome)

Abstract

This paper provides a conceptual framework to analyse risks and vulnerabilities in crypto-asset markets and describes the episodes of stress observed in these markets in 2022. The analysis is used to provide preliminary policy considerations that are relevant for financial stability. We highlight the importance of setting a clear perimeter for financial regulation and of developing global rules to address financial stability risks in the areas covered by financial regulation following the principle “same risk, same regulatory outcome”. Authorities could discourage and monitor exposures of supervised or overseen operators to areas not directly covered by financial regulation while trying to incentive the adoption of safe and sound risk management practices by entities involved or operating in these areas. Finally, we provide concrete proposals to implement these considerations. Mercati delle criptoattività: struttura, sviluppi del mercato nel 2022 e considerazioni di policy L’articolo fornisce un quadro concettuale per analizzare i rischi e le vulnerabilità nei mercati delle criptoattività e descrive gli episodi di stress osservati in questi mercati nel 2022. L’analisi viene utilizzata per proporre alcune considerazioni preliminari di policy rilevanti per la stabilità finanziaria. Viene evidenziata l’importanza di definire chiaramente il perimetro di applicazione della regolamentazione finanziaria e di sviluppare regole globali per ridurre i rischi per la stabilità finanziaria seguendo il principio “stesso rischio, stesso risultato normativo” nelle aree soggette alla regolamentazione finanziaria. Le autorità potrebbero scoraggiare e monitorare le esposizioni degli operatori vigilati o sorvegliati verso le aree non direttamente comprese nel perimetro della regolamentazione finanziaria, incentivando al contempo l’adozione di pratiche di gestione del rischio prudenti da parte dei soggetti coinvolti o operanti in queste aree. Infine vengono fornite proposte concrete per attuare queste considerazioni.

Suggested Citation

  • Abate, Giorgio & Branzoli, Nicola & Gallo, Raffaele, 2023. "Crypto-Asset Markets: Structure, Market Developments in 2022 and Policy Considerations," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 76(3), pages 353-386.
    • Handle: RePEc:ris:ecoint:0949
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    References listed on IDEAS

    as
    1. Bullmann, Dirk & Klemm, Jonas & Pinna, Andrea, 2019. "In search for stability in crypto-assets: are stablecoins the solution?," Occasional Paper Series 230, European Central Bank.
    2. Raphael Auer & Marc Farag & Ulf Lewrick & Lovrenc Orazem & Markus Zoss, 2022. "Banking in the shadow of Bitcoin? The institutional adoption of cryptocurrencies," BIS Working Papers 1013, Bank for International Settlements.
    3. Sirio Aramonteand & Wenqian Huang & Andreas Schrimpf, 2021. "DeFi risks and the decentralisation illusion," BIS Quarterly Review, Bank for International Settlements, December.
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    Cited by:

    1. Beltrametti, Luca & Pittaluga, Giovanni Battista, 2023. "Monetary Policy Implications of Stablecoins and CBDCs," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 76(3), pages 453-478.

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    More about this item

    Keywords

    Cryptoassets; Financial Stability; Stablecoin; Decentralized Finance; Leverage; Investor Run;
    All these keywords.

    JEL classification:

    • G00 - Financial Economics - - General - - - General
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation

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