And recently, some stablecoins—a type of cryptocurrency—have failed to deliver on their promise of stability. While cryptoassets do not yet pose a systemic risk to the Canadian financial system, the lack of regulation means they don’t have the safeguards that exist for more traditional assets. And their risks may not be well-understood by investors.
BIS Review 50/2007  5  vulnerable to movements in interest rates and exchange rates. A reduction in the perceived risk that a government may not be able to service its debts makes changes in investor sentiment and financial contagion less likely, thereby reducing financial market volatility.