Implications Of Crypto Assets On The Macroeconomic Sector
Abstract
There are numerous untested concerns about cryptocurrencies and the economic consequences of their varied implementations. There is a wide range of viewpoints and estimates for the future, and the economic consequences will differ based on countries, which may give advantages and downsides. Furthermore, there is inadequate data to develop macroeconomic models for crypto assets considering none have been incorporated in monetary finance statistics. In order to predict the macroeconomic implications of various regulation scenarios, a literature analysis was conducted on publications that gave qualitative analysis of how cryptocurrencies might impact particular economies and the international financial system.
The possibility of macroeconomic implications discussed in this study are classified according to the following criteria: financial stability; equity and safety; innovation; and sustainability. Using data from financial institutions, crypto asset service providers, and analytics firms, crypto assets pose a systemic a risk to the financial system's stability but also failed to advance financial inclusion. Concern about crypto assets unilization to facilitate illicit activities remain overblown, but its threat to environmental sustainability is significant, due to the “proof-of-work†mining method and its reliance to fossil fuel. Policymakers should work proactively with business and technology communities to clarify how regulatory models are shaped and to mitigate economic risks as much as feasible.
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