'Crypto bad' BIS–
Confidence Game
Crypto comes under the microscope: The Bank for International Settlements offered a jaundiced perspective on digital currencies earlier this week, concluding in a white paper that the emergent asset class “ha[s] so far not reduced but rather amplified the financial risks in less developed economies.”
The central bankers own Swiss bank cited a litany of potential pitfalls in support of that conclusion, ranging from opacity to price volatility and illiquidity. Credit risk, too, looms large: “related party transactions can create complex networks of interconnected entities and increase the risk of counterparty failures,” the BIS warns, citing the fall 2022 collapse of crypto exchange FTX and its sister trading firm, Alameda Research.
Questionable corporate governance across the industry amplifies those wide-ranging concerns: “[in] some cases, the individuals or entities who are responsible for the functioning, rules and activities related to crypto assets are unknown. In other cases, governance is dispersed among multiple entities that have control or influence only over certain aspects or activities.”
https://www.grantspub.com/resources/commentary.cfm