Prudential Supervision: Virtual Assets

After the recent failure of several major crypto firms, the need to address the risks involved in virtual asset markets has become an even more pressing policy issue. 

The scale and prominence of these failures underscore the urgency of addressing potential risks.

Many authorities are looking into how these risks should be addressed and, consequently, whether and how to regulate virtual assets. 

The following interaction explores the benefits and potential of virtual assets, the challenges involved, and guidance for supervisors operating in this sector. 

Additional Reading 

• Aldasoro, I., Aquilinia, M., Lewrisk, U., and Lim, S.H., 2025, Stablecoin Growth – Policy Changes and Approaches, BIS Bulletin, https://www.bis.org/publ/bisbull108.htm
• Aquilina, M., Frost, J., and Schrimpf, A., 2023, Addressing the Risks in Crypto: Laying out the Options, BIS Bulletin, https://www.bis.org/publ/bisbull66.htm
• Bains, P., Ismail, A., Melo, F., and Sugimoto, N., 2022a, Regulating the Crypto Ecosystem: The Case of Unbacked Crypto Assets, IMF, https://www.imf.org/en/Publications/fintech-notes/Issues/2022/09/26/Regulating-the-Crypto-Ecosystem-The-Case-of-Unbacked-Crypto-Assets-523715
• Bains, P., Ismail, A., Melo, F., and Sugimoto, N., 2022b, Regulating the Crypto Ecosystem: The Case of Stablecoins and Arrangements, IMF, https://www.imf.org/en/Publications/fintech-notes/Issues/2022/09/26/Regulating-the-Crypto-Ecosystem-The-Case-of-Stablecoins-and-Arrangements-523724
• Basel Committee on Banking Supervision, 2022, Prudential Treatment of Cryptoasset Exposures, BIS, https://www.bis.org/bcbs/publ/d545.htm
• Crisanto, J.C., Ehrentraud, J., and Ocampo, D.G., 2024, Stablecoins: Regulatory Responses to Their Promise of Stability, BIS, https://www.bis.org/fsi/publ/insights57.pdf
• FATF, 2025, Targeted Update on Implementation of the FATF Standards on Virtual Asset Service Providers, https://www.fatf-gafi.org/content/dam/fatf-gafi/recommendations/2025-Targeted-Upate-VA-VASPs.pdf.coredownload.pdf
• FSB, 2023, High-Level Recommendations for the Regulation, Supervision and Oversight of Cryptoasset Activities and Markets: Final Report, High-level Recommendations for the Regulation, Supervision and Oversight of Crypto-asset Activities and Markets: Final report - Financial Stability Board https://www.fsb.org/2023/07/high-level-recommendations-for-the-regulation-supervision-and-oversight-of-crypto-asset-activities-and-markets-final-report/
• FSB, 2022, Regulation, Supervision and Oversight of Cryptoasset Activities and Markets: Consultative Report, https://www.fsb.org/2022/10/regulation-supervision-and-oversight-of-crypto-asset-activities-and-markets-consultative-report/
• IOSCO, 2023, Policy Recommendations for Crypto and Digital Asset Markets, Final Report, https://www.iosco.org/library/pubdocs/pdf/IOSCOPD747.pdf