Publication:
Can Crypto-Assets Play a Role in Foreign Reserve Portfolios? Not Today, and Likely Not in the Near Future

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dc.contributor.authorFeyen, Erik
dc.contributor.authorKlingebiel, Daniela
dc.contributor.authorRuiz, Marco
dc.date.accessioned2024-02-28T16:41:31Z
dc.date.available2024-02-28T16:41:31Z
dc.date.issued2024-02-28
dc.description.abstractCiting crypto-assets’ growing market capitalization and footprint and evolving market structure, institutional investors, including central banks, have been exploring exposures to crypto-assets and reviewing whether including these instruments in their portfolios is reasonable. The authors discuss the potential role of crypto-assets in central bank reserve portfolios and argue that these instruments do not at present meet the eligibility criteria for inclusion. Crypto-assets are currently incompatible with the traditional objectives of safety, liquidity, and return; their value can be highly volatile, undermining their reliability as a store of value; and despite some guidance from policy makers and standard-setting bodies, they still face an uncertain regulatory environment. Crypto-assets typically operate on open, decentralized computer networks. Some decentralized networks aim to maintain an immutable distributed ledger that enables users to store funds with global reach and relatively fast settlement in a purely peer-to-peer fashion without the need for intermediaries or the potential for third-party interference. This paper is organized into two substantive sections, followed by a conclusion. The first main section assesses the suitability of crypto-assets for central bank reserve managers’ purposes. The second substantive section analyzes the fundamental changes required if crypto-assets are to become eligible instruments for reserve portfolios. The conclusion summarizes the findings from analysis.en
dc.identifierhttp://documents.worldbank.org/curated/en/099553102232444409/IDU1c16366af173fa148931a28b189e8eca412f3
dc.identifier.doi10.1596/41121
dc.identifier.urihttps://hdl.handle.net/10986/41121
dc.languageEnglish
dc.language.isoen_US
dc.publisherWashington, DC: World Bank
dc.relation.ispartofseriesEquitable Growth, Finance and Institutions Insight - Finance
dc.rightsCC BY-NC 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttps://creativecommons.org/licenses/by-nc/3.0/igo/
dc.subjectCRYPTO ASSETS
dc.subjectFOREIGN RESERVE PORTFOLIOS
dc.subjectIMPROVED LIQUIDITY
dc.subjectREDUCED PRICE VOLATILITY
dc.subjectFINANCIAL FLOWS
dc.titleCan Crypto-Assets Play a Role in Foreign Reserve Portfolios? Not Today, and Likely Not in the Near Futureen
dc.typeReport
dspace.entity.typePublication
okr.crossref.titleCan Crypto-Assets Play a Role in Foreign Reserve Portfolios? Not Today, and Likely Not in the Near Future
okr.date.disclosure2024-02-28
okr.date.lastmodified2024-02-23T00:00:00Zen
okr.doctypeEconomic & Sector Work
okr.docurlhttp://documents.worldbank.org/curated/en/099553102232444409/IDU1c16366af173fa148931a28b189e8eca412f3
okr.guid099553102232444409
okr.identifier.docmidIDU-c16366af-73fa-4893-a28b-89e8eca412f3
okr.identifier.doihttps://doi.org/10.1596/41121
okr.identifier.externaldocumentum34264849
okr.identifier.internaldocumentum34264849
okr.identifier.report187892
okr.import.id3282
okr.importedtrueen
okr.language.supporteden
okr.pdfurlhttp://documents.worldbank.org/curated/en/099553102232444409/pdf/IDU1c16366af173fa148931a28b189e8eca412f3.pdfen
okr.region.geographicalWorld
okr.topicFinance and Financial Sector Development::Finance and Development
okr.unitEFI-FCI-Finance-GD (EFNDR)
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