Skip to content

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

Which statement best describes the relationship between a ban, containment and regulation of unbacked crypto assets as presented in the IMF's policy discussion?

The approaches form a spectrum rather than exclusive choices. A country can combine elements, such as regulating crypto service providers while containing banks' exposures, tailoring the mix to its risks, enforcement capacity and policy objectives, rather than being restricted to a single approach.

  1. AThey are mutually exclusive, and only one may be used by a country
  2. BThey sit along a spectrum of responses, and countries may combine elements, for example regulating certain activities while containing financial-sector exposuresCorrect
  3. COnly regulation reduces risks to consumers, while the other two have no effect
  4. DContainment is used only after a ban has been repealed

Explanation

The approaches are not rigid alternatives. Authorities can tailor a mix, such as regulating domestic service providers while limiting bank exposures, depending on risks and capacity.

Did you get it right without looking?

One question tells you little. A timed set on Regulating the Crypto Ecosystem: The Case of Unbacked Crypto Assets shows your real accuracy, how long you take and where you lose marks.

Practise Regulating the Crypto Ecosystem: The Case of Unbacked Crypto AssetsFree diagnostic mock

More Regulating the Crypto Ecosystem: The Case of Unbacked Crypto Assets questions