Definition ∞ A systemic risk factor represents an element or event that could cause a collapse or severe disruption across an entire financial system or market. In the context of digital assets, this might include the failure of a major stablecoin, a widespread smart contract exploit, or significant regulatory intervention. Such a factor has the potential to trigger a cascade of failures, impacting interconnected entities and assets. It poses a threat to the stability of the broader digital economy.
Context ∞ The identification and mitigation of systemic risk factors are paramount concerns for regulators and participants in the digital asset space. Debates often focus on the potential for contagion from decentralized finance protocols to traditional financial markets. Future developments include international cooperation on regulatory frameworks and the implementation of stress tests for major digital asset entities to assess their resilience.
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