CBDCs, regulated stablecoins and tokenized traditional assets under the Basel Committee rules on cryptoassets
Research output: Journal Publications and Reviews › RGC 21 - Publication in refereed journal › peer-review
Author(s)
Related Research Unit(s)
Detail(s)
| Original language | English |
|---|---|
| Pages (from-to) | 31-47 |
| Journal / Publication | Journal of Financial Regulation and Compliance |
| Volume | 33 |
| Issue number | 1 |
| Online published | 16 Sept 2024 |
| Publication status | Published - Jan 2025 |
Link(s)
Abstract
Purpose - This paper examines the impact of Central Bank Digital Currencies (CBDCs), regulated stablecoins and tokenized traditional assets on the cryptocurrency market, following the guidelines set by the Basel Committee. This study aims to analyze the implications for secure storage, cross-border transfers and necessary investments.
Design/methodology/approach - The paper uses a policy analysis approach to assess the potential effects of the Basel Committee’s regulations on CBDCs, regulated stablecoins and tokenized traditional assets. It explores their impact on the cryptoasset market, strategies of central and commercial banks, payment systems and risk management.
Findings - The adoption of CBDCs, regulated stablecoins and tokenized traditional assets is expected to grow rapidly in the coming years. It raises concerns about secure storage, cross-border transfers and required investments. Central banks are likely to introduce CBDCs and authorize stablecoin issuance, aiming for efficient monetary policies and risk management. Basel III regulations may lead to asset tokenization by banks, reducing asset size and increasing fee-based income.
Originality/value - This paper provides insights into the potential impact of the Basel Committee's regulations on CBDCs, regulated stablecoins and tokenized traditional assets. It contributes to the understanding of the evolving cryptoasset market and the strategies of central and commercial banks in adopting these technologies. The findings offer valuable information for policymakers, regulators and market participants in navigating the changing landscape of digital assets.
© 2024, Michael Chak Sham Wong, Emil Ka Ho Chan and Imran Yousaf.
Design/methodology/approach - The paper uses a policy analysis approach to assess the potential effects of the Basel Committee’s regulations on CBDCs, regulated stablecoins and tokenized traditional assets. It explores their impact on the cryptoasset market, strategies of central and commercial banks, payment systems and risk management.
Findings - The adoption of CBDCs, regulated stablecoins and tokenized traditional assets is expected to grow rapidly in the coming years. It raises concerns about secure storage, cross-border transfers and required investments. Central banks are likely to introduce CBDCs and authorize stablecoin issuance, aiming for efficient monetary policies and risk management. Basel III regulations may lead to asset tokenization by banks, reducing asset size and increasing fee-based income.
Originality/value - This paper provides insights into the potential impact of the Basel Committee's regulations on CBDCs, regulated stablecoins and tokenized traditional assets. It contributes to the understanding of the evolving cryptoasset market and the strategies of central and commercial banks in adopting these technologies. The findings offer valuable information for policymakers, regulators and market participants in navigating the changing landscape of digital assets.
© 2024, Michael Chak Sham Wong, Emil Ka Ho Chan and Imran Yousaf.
Research Area(s)
- Capital requirements, Banking regulation, Basel Committee, Cryptoassets, Bank asset-liability Management
Citation Format(s)
CBDCs, regulated stablecoins and tokenized traditional assets under the Basel Committee rules on cryptoassets. / Wong, Michael Chak Sham; Chan, Emil Ka Ho; Yousaf, Imran.
In: Journal of Financial Regulation and Compliance, Vol. 33, No. 1, 01.2025, p. 31-47.
In: Journal of Financial Regulation and Compliance, Vol. 33, No. 1, 01.2025, p. 31-47.
Research output: Journal Publications and Reviews › RGC 21 - Publication in refereed journal › peer-review
