Arbeitspapier
The financial stability implications of digital assets
The value of assets in the digital ecosystem has grown rapidly amid periods of high volatility. Does the digital financial system create new potential challenges to financial stability? This paper explores this question using the Federal Reserve's framework for analyzing vulnerabilities in the traditional financial system. The digital asset ecosystem has recently proven itself to be highly fragile. However, adverse digital asset market shocks have had limited spillovers to the traditional financial system. Currently, the digital asset ecosystem does not provide significant financial services outside the ecosystem, and it exhibits limited interconnections with the traditional financial system. The paper describes emerging vulnerabilities that could present risks to financial stability in the future if the digital asset ecosystem becomes more systemic, including run risks among large stablecoins, valuation pressures in crypto-assets, fragilities of DeFi platforms, growing interconnectedness, and a general lack of regulation.
- Language
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Englisch
- Bibliographic citation
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Series: Staff Report ; No. 1034
- Classification
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Wirtschaft
Financial Institutions and Services: General
Banks; Depository Institutions; Micro Finance Institutions; Mortgages
Financial Institutions and Services: Government Policy and Regulation
- Subject
-
digital assets
stablecoins
DeFi
financial stability
financial vulnerabilities
systemic risk
- Event
-
Geistige Schöpfung
- (who)
-
Azar, Pablo D.
Baughman, Garth
Carapella, Francesca
Gerszten, Jacob
Lubis, Arazi
Perez-Sangimino, Juan Pablo
Rappoport, David E.
Scotti, Chiara
Swem, Nathan
Vardoulakis, Alexandros
Werman, Aurite
- Event
-
Veröffentlichung
- (who)
-
Federal Reserve Bank of New York
- (where)
-
New York, NY
- (when)
-
2022
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Azar, Pablo D.
- Baughman, Garth
- Carapella, Francesca
- Gerszten, Jacob
- Lubis, Arazi
- Perez-Sangimino, Juan Pablo
- Rappoport, David E.
- Scotti, Chiara
- Swem, Nathan
- Vardoulakis, Alexandros
- Werman, Aurite
- Federal Reserve Bank of New York
Time of origin
- 2022
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