Digital currencies: Governing risks and opportunities (2022)

The possibility to capitalise on technological expertise applied to finance, the need to modernise payment and broader monetary systems, and other reasons, have triggered the development of a flurry of digital currencies including privately-issued crypto currencies such as Bitcoin or Ether (more than 10’000 of various types), stablecoins, projects for Central Bank Digital Currencies (CBDCs), crypto assets such as Non Fungible Tokens (NFTs), and associated trading platforms. Some facts:

  • Central banks and regulated commercial banks are no longer the only actors in money creation. New private actors in decentralised finance are challenging existing regulations and practices.
  • The dramatic growth in the use of digital currencies will have significant implications for various economic actors, particularly consumers, investors and businesses, and pose a number of significant risk governance challenges.
  • November 2022: the collapse of FTX (the second largest crypto exchange) may indicate loss of trust in crypto assets and severe deficits in regulation and/or implementation.
  • Technical concerns exist around security, privacy, scalability and efficiency. Governance aspects include impacts on financial inclusion, the illicit and informal economies, consumer protection, regulation and others.
  • As in many other domains, risks and opportunities are systemic and the potential for cascading effects across domains is high, so response strategies will have to be coordinated among many actors.

25-26 October 2022: In collaboration with the Swiss Re Institute and Horizon Group Geneva, IRGC organised an expert workshop to discuss alternative scenarios about the future of digital currencies and assets, which would have implications for various stakeholders and on governance approaches.

  • What are the socio-economic challenges and needs that distinct forms of crypto or digital currencies could address from various stakeholders’ perspectives? Which societal problems may require new currency instruments and new payment systems?
  • Which fundamental shifts in society can be supported or triggered by various types of DCs over the next 5-10 years?
  • What are the available options to manage various stakeholders’ needs, expectations and risks?
  • How can various actors govern opportunities and attendant risks in different scenarios?


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