Track 03Module 4 of 56 sources
Where it breaks: stability risks and retail losses
List the specific ways tokenised markets fail, and what past crypto shocks did to small investors.
Key ideas
- Liquidity mismatch: a token that redeems instantly against an asset that sells slowly invites a run.
- Leverage and interconnection: tokens reused as collateral across platforms spread a single failure quickly.
- Operational risk: smart contract bugs, key loss and concentration in a few service providers.
- The BIS found that during crypto crashes most retail users lost money, while large holders sold to them on the way down.
Start hereWatch or read these first. They carry the core idea.
Report
The Financial Stability Implications of Tokenisation
Financial Stability Board · 2024
The global regulators' checklist of how tokenisation could threaten stability.
Report
Crypto shocks and retail losses (BIS Bulletin 69)
BIS · 2023
The evidence on who lost money in the 2022 crypto shocks. Short and sobering.
Paper
Tokenization: Overview and Financial Stability Implications
Federal Reserve FEDS · 2023
The Federal Reserve staff view of the same risks, with numbers.
CoreThe standard references. Work through them once the idea is clear.
Digital Asset Treasuries Under Pressure, IMF Warns of Tokenization Risks | Bloomberg Crypto 4/7/2026
Video · Bloomberg Television · 44:35
Market coverage of the IMF's warnings and stress in digital asset treasuries.
Report
Stablecoin growth: policy challenges and approaches (BIS Bulletin 108)
BIS · 2025
Why fast-growing stablecoins raise run and integrity risks.
Regulator
Markets in Crypto-Assets Regulation (MiCA)
ESMA
The European rulebook. The reference point for how regulation is likely to look elsewhere.
Practice
For the product you examined earlier, write the three most likely ways a holder loses money. For each, name the warning sign you could observe in advance.
See it live
Where this leads
08.3 · Risk, Losses and ProcessLeverage, crowding and blow-upsRecognise the conditions that turn a good trade into a disaster: leverage, crowding and liquidity that vanishes.08.2 · Risk, Losses and ProcessWhy most traders lose: the evidenceKnow the base rates for retail trading so that your plan starts from reality.