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Is this time different? Lessons from recent crypto turmoil
Past May, the third largest so-called stablecoin TerraUSD and its sister token Luna imploded, obliterating a combined market value once estimated at USD 60 billion. The crash of this algorithmic stablecoin -not backed by...
The fintech market has radically changed the financial landscape, redesigning financial intermediation’s business models leveraging emerging technologies’ potentiality in generating economy of scale, scope, and network effect. While fintech companies have increased competition in the market, giving access to specific financial services through new digital channels this endogenous force of innovation comes from the combinations of business models and technologies operating in blind spots that are not covered by the current regulatory framework. Non-regulated entities are challenging regulators and supervisors with potential regulatory arbitrage that could threaten at once financial stability, consumer and investor protection, market efficiency and integrity. This has led to a fundamental discussion among regulators on finding the right balance in policy trade-offs on financial innovation.