Similarly, the widespread use of VCs for payment or settlement could affect economic transactions on a large scale and disrupt the financial system. Amid such potential risks, resolute ring-fencing measures may be needed to safeguard the integrity of financial sector services, protect investors and consumers, and prevent negative spillovers to the real economy.
The four broad areas that require particular attention are: (i) VCs themselves; (ii) the facilitators – VC exchanges, wallet-providers and brokers; (iii) financial market infrastructures (FMIs); and (iv) the banking sector. Regulating virtual currencies VCs cannot be directly regulated or overseen in the absence of a centralised governance and legal framework.