Cryptoassets

In the recent past, rapid growth in cryptoassets and related activities has been observed globally, along with various cases of abrupt collapse in the cryptoasset market. These circumstances have drawn the attention of international bodies and national authorities to their implications for financial stability, potential macro-financial effects, and the risks they pose to individual users and investors. Cryptoassets are used predominantly for speculative purposes and are characterized by their cross-border and cross-cutting nature, which limits their fit within existing legal and regulatory frameworks; anonymity and the use of pseudonyms, which prevents the identification of counterparties; the absence of backing assets or safeguards, highlighting risks for investors; and the lack of risk disclosure requirements, reflecting information asymmetries and limited transparency. These characteristics, together with information gaps that hinder effective monitoring of developments and interconnections with the traditional financial system, suggest the need to adopt a precautionary stance. In this context, policy responses have been marked by wide variation in scope and form, including approaches based on prohibition, risk containment, and regulation of the activity. This diversity of responses reflects the challenges faced by authorities, the differentiated effects of cryptoassets across economies, and each jurisdiction’s policy objectives.

The Central Bank of the Argentine Republic (BCRA) is carrying out monitoring activities in order to further its understanding of domestic cryptoasset use cases, with particular emphasis on the implications and risks they entail. In May 2021, jointly with the National Securities Commission (CNV), it published an alert highlighting the high volatility of these instruments, the risks associated with operational disruptions and cyberattacks, ML/FT risks, as well as potential non-compliance with foreign exchange regulations and the absence of safeguards provided for under the current regulatory framework. In May 2022, seeking to mitigate the risks that activities involving these instruments pose both to users and to the financial system as a whole, the BCRA established that financial institutions under its regulation may not participate, directly or indirectly, in offering cryptoassets to customers. Subsequently, through another regulation of similar tenor, in May 2023 the BCRA provided that payment service providers offering payment accounts (PSPCP) may neither carry out nor facilitate for their customers transactions in digital assets, including cryptoassets.

Below are references to the BCRA’s actions and publications on the matter, followed by a section that groups a selected set of publications by other central banks and international bodies, seeking to reflect the wide range of assessments regarding the risks of cryptoassets, as well as proposed policy actions aimed at addressing them.

Central Bank Actions

2023-05-04 | Payment service providers may neither carry out nor facilitate transactions in cryptoassets

2022-05-05 | The BCRA discourages the offering of cryptoassets through the financial system

2021-05-20 | BCRA and CNV alert on the risks and implications of cryptoassets

Central Bank Publications

2022-07-07 | Cryptoassets. Some recent developments and main implications. Section 3 of the Financial Stability Report (FSR), July 2022.

2019-11-14 | Stablecoins. Developments and implications for financial stability. Section 3 of the Financial Stability Report (FSR), November 2019.

2018-11-14 | Cryptoassets: technological innovation and financial stability. Section 1 of the Financial Stability Report, second half of 2018.

Other publications

European Central Bank

Panetta, F. (2023) (ECB’s Executive Board), Caveat emptor does not apply to crypto, article published on the European Central Bank (ECB) Blog, January 2023.

Panetta, F. (2023) (ECB’s Executive Board), Crypto dominos: the bursting crypto bubbles and the destiny of digital finance, speech, December 2022.

The White House

Biden, J.B. (2022) (The White House), Executive Order on Ensuring Responsible Development of Digital Assets, March 2022.

Federal Reserve

Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation Office of the Comptroller of the Currency (2023), Joint Statement on Crypto-Asset Risks to Banking Organizations, January 2023.

Gibson, M.S. et al. (FED´s Staff), SR 22-6 / CA 22-6: Engagement in Crypto-Asset-Related Activities by Federal Reserve-Supervised Banking Organizations, August 2022.

International organizations and forums

Aquilina, M. et al. (BIS´ Staff) (2023), Addressing the risks in crypto: laying out the options, BIS Bulletin No 66, January 2023.

Bank for International Settlements (BIS) (2022), Prudential treatment of cryptoasset exposures, December 2022.

Bank for International Settlements (BIS) (2022), Chapter 3: The future monetary system, BIS Annual Economic Report, June 2022.

He, D. et al. (IMF´s Staff) (2022), Capital Flow Management Measures in the Digital Age: Challenges of Crypto Assets, FinTech Notes No 2022/005, May 2022.

International Monetary Fund (IMF) (2023a), G20 Note on the Macrofinancial Implications of Crypto Assets, February 2023.

International Monetary Fund (IMF) (2023b), Elements of Effective Policies for Crypto Assets, Policy Paper No. 2023/004, February 2023.

International Monetary Fund (IMF) (2021), Chapter 2: The Crypto Ecosystem and Financial Stability Challenges, Global Financial Stability Report, October 2021.

Financial Stability Board (FSB) (2022a), Assessment of Risks to Financial Stability from Crypto-assets, February 2022

Financial Stability Board (FSB) (2022b), FSB Statement on International Regulation and Supervision of Crypto-asset Activities, July 2022.

Financial Stability Board (FSB) (2022c), Regulation, Supervision and Oversight of Crypto-Asset Activities and Markets: Consultative report, October 2022.

Financial Stability Board (FSB) (2022d), Review of the FSB High-level Recommendations of the Regulation, Supervision and Oversight of “Global Stablecoin” Arrangements: Consultative report, October 2022.

Fuje, H. et al. (IMF’s African Department) (2022), Digital Currency Innovations in Sub-Saharan Africa, Regional Economic Outlook: Sub-Saharan Africa Analytical Note, October 2022.

Government of India, Ministry of Finance, Department of Economic Affairs (2023b), Press Release on Panel Discussion on “Policy Perspective: Debating the Road to Policy Consensus on Crypto Assets”, February 2023.

Shin, H. (BIS’s Economic Adviser and Head of Research) (2022), The great crypto crisis is upon us, opinion piece published in the Financial Times, December 2022.