Hybrid risks combine elements from both traditional finance and decentralized digital asset systems. These risks emerge at the intersection of conventional financial practices and novel blockchain technologies, presenting complex challenges for assessment and mitigation. Examples include operational failures of centralized crypto exchanges interacting with decentralized protocols or regulatory uncertainties spanning multiple jurisdictions. Understanding hybrid risks requires expertise in diverse financial and technological domains.
Context
As the digital asset space converges with traditional finance, hybrid risks are a growing area of concern for regulators and institutional participants. News coverage frequently addresses the complexities of managing these combined exposures, particularly in areas like stablecoin reserves or tokenized real-world assets. Developing robust frameworks to address these intertwined risks remains a priority for market stability.
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