Ticking crypto time bomb could spark another financial crisis | domp
which aims to examine, challenge and demystify the ideas behind the emerging industry by speaking to the people who live and breathe it.I am a financial regulatory scholar and so my broader focus is on how we prevent financial crises. And sometimes that’s about structural questions like how do we set up financial regulatory agencies appropriately, but other times it’s looking at the new things coming down the pipe that could threaten financial stability in the future.
Something else we saw was new types of mortgage-backed securities that were structured in a way that the contracts were very rigid, and couldn’t be amended easily when things changed. What we’re seeing again is that same kind of rigidity recreated in DeFi with smart contracts. We’re getting this rigidity back in the system and what we really need to protect the system against future problems is flexibility.
So for all of those reasons, I think we’ve got a real replication or even magnification of the problems that we had leading up to the GFC. But what I am focusing on with my work is exactly how does this bleed out from just the individual harm into a problem that could affect people who never even invested in crypto in the first place? This is where I think it’s critical as a matter of regulatory policy to stop regulated financial institutions, such as banks, from participating in the crypto economy because that is where an individual idiosyncratic problem becomes a systemic problem.
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Australia's national electricity market has been suspended for the first time. How did it come to this?The national energy market has been fully suspended for the first time since its inception 24 years ago amid an energy crisis that's gripping Australia's east coast.
Read more »
CBA dodges crypto bulletCrypto prices are crashing as rates rise, but Australian corporates are soldiering on like Monty Python’s Black Knight, as if it’s ‘just a flesh wound’.
Read more »
Crypto fortunes are vanishing as quickly as they were madeOnce seen as ushering in a new era of decentralised finance, crypto has been rocked by two high-profile implosions in the span of weeks.
Read more »
Gas crisis LIVE updates: Decade of ‘very poor’ policy blamed for energy crisisAustralian Energy Council says price cap causing some generators to withdraw plants; ex-RBA board member says 10 years of “very poor” climate, energy policy to blame for crisis. Follow updates here.
Read more »
US announces plan to build silos on Ukraine border to export grainJoe Biden working with European governments to avert global crisis and help lower food prices
Read more »
Bill Gates says crypto and NFTs are a sham, as Bitcoin plunge continuesGates jokes that "expensive digital images of monkeys" will "improve the world immensely".
Read more »