Bank for international settlements: The crypto market has reached a "critical scale," and stability risks must be heeded.

PANews April 19 news, according to LedgerInsights, the Bank for International Settlements (BIS) released a paper this week exploring the financial stability risks of Crypto Assets and Decentralized Finance (DeFi). Most Central Bank officials believe that the scale of Crypto Assets is too small and self-contained, thus not yet posing a financial stability risk. The report points out that the Crypto Assets market has "reached a critical scale," although it still considers the links between Crypto Assets and Traditional Finance (TradFi) to be minimal. However, the issuance of Bitcoin ETF, the expansion of stablecoins, and the tokenization of Real World Assets (RWA) are changing this situation. The report suggests further research on the role of DAO in governance, how it affects financial stability, and how regulatory agencies can engage with it. When outlining how DeFi operates, it points out the distinction between DeFi protocols and applications, the latter typically having a user interface and "centralized vectors." In other words, dApps are potential regulatory touchpoints. At the same time, researching the impact of RWA tokenization on financial stability is urgent, including the systemic risks of tighter connections between DeFi and TradFi. Additionally, stablecoins play a central role in DeFi, and their potential instability is an area that requires further analysis.