Abstract
This paper provides an in-depth analysis of financial risk management in the era of cryptocurrencies and digital assets. As digital currencies continue to disrupt traditional economic systems, they introduce new forms of volatility, liquidity challenges, and regulatory uncertainties that existing risk management frameworks must be fully equipped to handle. This study explores the distinctive characteristics of digital assets and their implications for market risk, liquidity risk, and regulatory compliance. The experiences of Goldman Sachs and Silvergate Bank demonstrate the importance of a comprehensive risk management strategy, emphasizing due diligence, regulatory compliance, and adaptability in navigating the volatile cryptocurrency market. It also evaluates the effectiveness of emerging risk-reducing strategies, including hedging, insurance, and portfolio diversification. By examining case studies and evolving regulatory strategies, the paper offers deep insights into how financial institutions can adapt their risk management practices to maintain stability in an increasingly digital financial ecosystem.
Citations
IRE Journals:
Adeyemi Daramola
"Financial Risk Management in the Era of Cryptocurrencies and Digital Assets" Iconic Research And Engineering Journals Volume 8 Issue 3 2024 Page 320-331
IEEE:
Adeyemi Daramola
"Financial Risk Management in the Era of Cryptocurrencies and Digital Assets" Iconic Research And Engineering Journals, 8(3)
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