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Managing Risk for the Next Wave of Digital Currencies

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Managing Risk for the Next Wave of Digital Currencies

Boston Consulting Group,

5 min read
3 take-aways
Audio & text

What's inside?

Digital currencies are transforming financial services and investments while bringing opportunity and risk. 

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Editorial Rating

8

Qualities

  • Applicable
  • Eye Opening
  • Hot Topic

Recommendation

Since the release of bitcoin in 2009, digital currencies have become their own asset class — a mix of tokens, stablecoins, transaction cryptocurrencies, and central bank digital currencies. But the complexities of digital monies and their constant innovation and evolution create issues for global financial institutions and international payment systems. Boston Consulting Group professionals and other experts explore the risks and construct a blueprint that financial institutions can follow to effectively mitigate those risks, as well as reduce the potential for systemic financial contagion. Investors, financial executives, and cryptocurrency stakeholders will find this a robust assessment.

Summary

Financial institutions are increasing their exposure to cryptocurrencies, as clients demand more products and services within the asset class.

Blockchain technology and cryptocurrencies are transforming how global industries, companies, and governments conduct business. The international financial and banking sector is no exception, and it is at the epicenter of crypto disruption.

The interesting paradox is that the nature of blockchain and digital currencies is to transact without the structure of a centralized clearing mechanism, which is precisely the opposite of how the traditional banking system operates.

Yet investors and clients continue to seek access to a suite of services pertaining to cryptocurrencies. Against this backdrop, global banking leaders face uncertainties they must navigate as part of...

About the Authors

Bernhard Kronfellner et al. are digital currency and transformation experts at Boston Consulting Group, FalconX, and B Capital.

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