Cryptos on the rise 2022 !!

crypto-assets and the vast universe of associated products and services have grown rapidly in recent years and are becoming increasingly interlinked with the regulated financial system. Policymakers appear to be struggling to keep track of risks posed by a sector where most activities are unregulated, or at best lightly regulated.
Financial stability risks could soon become systemic in some countries, according to the International Monetary Fund (IMF).

Crypto-assets are potentially changing the international monetary and financial system in profound ways.
IMF blog

December 2021
There is also concern that uncoordinated regulatory actions may facilitate potentially destabilizing capital flows. The IMF estimates cryptos’ market capitalization at $2.5 trillion. This may be an indication of the significant economic value of the underlying technological innovations such as the blockchain, although it might also reflect froth in an environment of stretched valuations.
Cryptos’ potential to transform the traditional financial system means the associated challenges are attracting considerable regulatory attention. The focus is twofold: cryptos’ possible impact on financial stability and the need to protect vulnerable customers.

The principal challenge is the need for an internationally coherent policy approach, including definitions and jurisdictional perimeters, and in terms of exchanges, prevention of market manipulation and systemic risks. Lending and payment risks, banking, payments and anti-money laundering (AML) risks, tax policy and tax evasion risks, securities fraud and scams, together with cyber security, hacking and privacy risk will all need to be addressed.

But perhaps the most fundamental question is this: in a system where so many new, previously non-financial, players are becoming instrumental in offering financial services, how are we, as financial supervisors, going to ensure that the financial system remains robust and consumers stay safe? How can we make sure that we continue to have the right mandate and effective instruments to ensure that outcome?
Steven Maijoor

Executive director of supervision, Dutch Central Bank (De Nederlandsche Bank), February 2022
The increasing regulatory challenges are exacerbated by the growing public awareness, acceptance and use of cryptos. From the U.S. perspective, research published[1] in November 2021 by Pew Research, a nonpartisan think tank in Washington, reported 16% of respondents saying they personally have invested in, traded or otherwise used cryptocurrencies. Newsweek Magazine cited a survey in January 2022 by the crypto firm New York Digital Investment Group, estimating the total number of Americans who own cryptos at 46 million (about 14% of the population).
In the UK, in June 2021, the UK Financial Conduct Authority published its fourth consumer research publication on crypto-assets ownership[2] which found heightened public interest in, and media coverage of, cryptos, with 78% of adults now having heard of cryptocurrencies. Around 2.3 million now own crypto-assets, up from around 1.9 million in 2020.

The UK regulator also found attitudes have shifted, as cryptocurrencies appear to have become more normalized — fewer crypto users regard them as a gamble (38%, down from 47%) and more see them as an alternative or complement to mainstream investments, with half of crypto users saying they intend to invest more in the future.

In the European Union, as of February 2022, the total market capitalization of crypto-assets is reported[3] as having increased eightfold in the last two years to around 1.5 trillion euros now, although around 1 trillion euros below its peak in November 2021. The suggestion is that crypto-assets are beginning to gain mainstream acceptability, with ownership peaking at 6% of Slovakians and 8% of Dutch nationals reported as owning crypto-assets.

This report is a follow-up to Regulatory Intelligence’s “Cryptos on Rise” special report[4] published in 2021. That report highlighted the need for policymakers, regulators and firms all to play their part in ensuring that cryptos are as "safe" as possible, not only in terms of investment risk but also with regards to regulatory certainty and cyber resilience.

The 2022 special report expands beyond cryptocurrencies such as bitcoin. Considering the need to develop a regulatory framework, it investigates other crypto-related instruments, such as central bank digital currencies (CBDCs), non-fungible tokens (NFTs) and stablecoins, and highlights policy work in key countries. It examines some of the misconceptions which persist about cryptos, as well as the ramifications for financial stability and the future of money. It also considers changing structural models for financial institutions emerging from the crypto world, as represented by decentralized autonomous organizations (DAOs).

by:
https://www.thomsonreuters.com/en/reports/cryptos-on-the-rise-2022.html