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Economic and regulatory aspects of crypto-assets

Author

Listed:
  • Andrea Caponera

    (Bank of Italy)

  • Carlo Gola

    (Bank of Italy)

Abstract

TIn this study, we investigate the economic characteristics of bitcoin and similar crypto-assets. Following an introduction to the blockchain protocol, the role of exchanges and of digital wallet providers, we consider the regulatory measures adopted in various jurisdictions. Lastly, we examine the accounting and prudential aspects related to crypto-assets, of which significant uncertainties still remain. The paper provides a taxonomy of crypto-assets, and describes the basic features of the initial coin offerings (ICOs) and related aspects. The literature shows that bitcoin, and similar crypto-assets, do not fully fall within the category of money and financial instruments. This class of digital tokens, based on a permissionless distributed ledger technology (DLT), is highly volatile and absent of intrinsic value. The instability of their price, which is often undetermined, must be considered when evaluating these instruments from an accounting and prudential standpoint.

Suggested Citation

  • Andrea Caponera & Carlo Gola, 2019. "Economic and regulatory aspects of crypto-assets," Questioni di Economia e Finanza (Occasional Papers) 484, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_484_19
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    More about this item

    Keywords

    bitcoin; crypto-assets; blockchain; digital tokens; initial coin offerings; exchanges;
    All these keywords.

    JEL classification:

    • E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • K20 - Law and Economics - - Regulation and Business Law - - - General
    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General

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