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FRM Part II · FRM Exam Part II · Regulating the Crypto Ecosystem: The Case of Unbacked Crypto Assets

A national authority wants to reduce the risk that retail households suffer large losses from unbacked crypto assets while still allowing the technology to develop. Which policy objective is most directly served by mandatory disclosure, suitability checks and marketing restrictions applied to crypto intermediaries?

Disclosure requirements, suitability checks and marketing restrictions target how crypto products are sold to retail users, so they primarily serve investor and consumer protection. They do not address monetary sovereignty, payment costs or tax revenue directly.

  1. AInvestor and consumer protectionCorrect
  2. BMonetary sovereignty preservation
  3. CReducing the cost of cross-border payments
  4. DFiscal revenue maximization

Explanation

Disclosure, suitability and marketing rules are conduct tools aimed at protecting retail users from misinformation and losses. Monetary sovereignty and payments cost objectives are addressed by different tools such as currency substitution policy or payment infrastructure.

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