Economics Dictionary of ArgumentsHome
| |||
|
| |||
| Cryptocurrency risks: Cryptocurrency risks are the potential for loss or negative outcomes associated with digital assets. These risks include extreme price volatility, making them a speculative and high-risk investment. Other risks are regulatory uncertainty, cybersecurity threats from hacking and scams, and the irreversible nature of transactions. The lack of government-backed insurance or legal protections also exposes investors to significant financial loss. See also Cryptocurrency, Crypto transactions._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
| Author | Concept | Summary/Quotes | Sources |
|---|---|---|---|
|
IMF Working Papers on Cryptocurrency Risks - Dictionary of Arguments
IMF V 10 Cryptocurrency Risks/IMF/Hacibedel/Perez-Saiz: Currently the main sources of risk to the external sector come from remittances and the volatility of cross-border capital flows. Leading to potentially lower transaction costs,* cryptos are likely to become increasingly important as a transmission channel. >Transaction costs. Lower transaction costs could also trigger highly volatile capital flows relying increasingly on crypto currencies. Moreover, transmission through trade could also be amplified and have implications for overall macroeconomic stability if the crypto market destabilizes. Reserve adequacy, external buffers and capital flow management (CFM) measuresmight need to be revisited for countries with high usage of crypto assets (IMF 2020(1); He et al., 2022(2)). Considering the decentralized nature of crypto markets and assets, their increased use could have implications for the monetary transmission mechanism. Cryptos could accelerate bank disintermediation, reduce the effectiveness of capital controls, and undermine traditional credit transmission channels, thus limiting the effectiveness of monetary policy. There is also the risk of creating a parallel market for exchange rates and domestic currencies. Additionally, the lack of data on the issuance size, holdings and transactions of crypto assets could lead to the mismeasurement of the money supply. >Cryptocurrency risks, >Cryptocurrency, >Crypto transactions, >Fake transactions, >Cross-border payments, >Money laundry, >Crypto regulation, >Blockchain, >Bitcoin, >Crypto Firms, >Crypto and Banking, >Payment systems, >Stablecoins, >Ethereum. * While crypto technologies have the potential to substantially reduce transaction costs, the median value of some crypto transactions, such as Bitcoin, can be higher than most conventional financial technologies used for domestic transactions. Internationally, the comparative advantage of cryptos depends crucially on the corridor considered (IMF, 2023a)(3). 1. International Monetary Fund, 2020. Digital Money Across Borders: Macro-Financial Implications. IMF Staff Report. 2. He, D., Kokenyne, A., Lavayssière, X., Lukonga, I., Schwarz, N., Sugimoto, N. and Verrier, J., 2022. Capital Flow Management Measures in the Digital Age: Challenges of Crypto Assets. FinTech Notes, 2022(005). 3. International Monetary Fund, 2023a. Elements of Effective Policies for Crypto Assets, IMF Board Paper, February 2023._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
IMF Working Papers IMF II IMF Working Paper André Reslow Gabriel Söderberg, Cross-Border Payments with Retail Central Bank Digital Currencies: Design and Policy Considerations IMF Fintech Note 2024/002 Washington, DC. 2024 IMF III IMF Working Papers Clemens Graf von Luckner Robin Koepke, Crypto as a Marketplace for Capital Flight. IMF Working Paper 24/133 Washington, DC. 2024 IMF IV IMF Working Papers Marco Pani Rodolfo Maino, “Could Digital Currencies Lead to the Disappearance of Cash from the Market? Insights from a ’Merchant-Customer’ Model.” IMF Working Paper WP/25/56 Washington, DC. 2025 |
||
Authors A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Concepts A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
