Fed Papers on DeFi and Financial Stability

Fed Papers on DeFi and Financial Stability

The Fed released two papers, The Financial Stability Implications of Digital Assets, and, Decentralized Finance (DeFi): Transformative Potential & Associated Risks.  Links here; former and ladder.

Financial Stability Implications of Digital Assets is heavy on the interconnectedness with traditional markets and legislation recommendations, with a strong emphasis on stablecoins.

"Shocks to digital assets can propagate due to interconnections within the digital ecosystem...the implications of stress in the crypto ecosystem on financial stability depend crucially on how interconnected it is with the traditional financial sector."

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