OECD Concerned About The Impact Of Crypto On The Financial System
According to recent research from the Organization for Economic Cooperation and Development (OECD), as the crypto company grows more tightly tied to traditional banking, the next crypto collapse might spark greater financial instability.
The OECD, which is made up of officials from 38 nations, works to standardize worldwide economic norms. Its reporting approach on crypto taxes inspired European Union legislation this month.
According to OECD researchers, the demise of these organizations revealed the interconnectedness of businesses in crypto. This raises the potential of widespread disruption and contagion throughout the crypto-asset markets if any of these big companies encounter difficulty in the future.
“Should conditions change, a future instance of similar turmoil in a larger crypto-asset market could have implications for financial stability,” the report said.
Decentralized finance (DeFi) is much more linked to exchanges than some proponents claim, according to the research, which calls centralized trading businesses “the lifeline of DeFi” since they offer a source of cash and collateral for DeFi protocols.
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