Our new paper suggests the answer may lie somewhere in the middle, and could lead to more effective policy responses
An explosion of cryptoassets – whose collective value
has grown more than six-fold over the past two years, notwithstanding
the recent market setback – to nearly $1.8 trillion, poses a major
challenge for policy makers around the world. Does the rise of these
digital assets merely reflect tremendous speculative excess, like the
notorious Tulip Mania of the 1630s, or is it more appropriate to regard
them as something akin to late 1990s dot-coms, which were inflated by
speculative fervor but contained the seeds of a valuable technological
transformation of our economies and societies?
There is as yet no clear consensus among financial officials about
the answer to that question, frustrating efforts to develop coherent
legal and regulatory approaches to the sector. Opinion ranges from
varying degrees of skepticism about cryptoassets to pragmatic acceptance
to outright support. One possible middle ground, explained in this
paper, is to regard cryptoassets as being similar to financial assets.
While most cryptoassets don’t have claims on cash flows or carry an
ownership interest, as conventional stocks and bonds do, major digital
assets like Bitcoin are no more volatile than many US equities and enjoy
greater market liquidity. If a consensus builds around this middle
approach, it could support more effective policy making.
Download the Paper
Oliver Wyman
© Oliver Wyman
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