Digital assets: risks, regulations, mitigation
Digital assets (DAs) such as cryptocurrencies, tokenized securities, stablecoins, non-fungible tokens (NFTs), and central bank digital currencies, are transforming financial markets with new business models, investment opportunities, and transaction efficiencies. Underpinned by blockchain, distributed ledger technology, and smart contracts, digital innovations are reshaping the financial ecosystem. However, their rapid growth introduces substantial risks, including fraud, market manipulation, cybersecurity threats, and regulatory uncertainty. This position paper offers an interdisciplinary and empirically grounded analysis of the DA landscape. We define and classify major asset types, trace their evolution from speculative instruments to functional tools, and assess current adoption trends. Additional technological developments (e.g., decentralized finance and NFT expansion) are examined for their role in accelerating this transformation. We also analyze the global regulatory landscape, highlighting jurisdictional differences, classification challenges, and emerging governance frameworks. To address key risks, we derive mitigation strategies via quantitative analysis and case-based evidence. The risks include balancing innovation with investor protection through adaptive regulatory design, promoting cross-border regulatory harmonization to prevent arbitrage and fragmentation, and supporting experimentation through regulatory sandboxes and innovation hubs. By adopting a forward-looking, evidence-based, and collaborative regulatory approaches, stakeholders can harness the benefits of DAs while managing systemic risks and maintaining market integrity.
Authors
- Huei-Wen Teng (ORCID: https://orcid.org/0000-0002-3651-9934)
- Sam Goundar (ORCID: https://orcid.org/0000-0001-6465-1097)
- Albulena Shala (ORCID: https://orcid.org/0000-0002-8403-4536)
- Audrius Kabašinskas (ORCID: https://orcid.org/0000-0001-6863-5895)
- Peter Schwendner (ORCID: https://orcid.org/0000-0001-9366-3564)
- Abraham Itzhak Weinberg (ORCID: https://orcid.org/0000-0002-2505-9653)
- Galena Pisoni (ORCID: https://orcid.org/0000-0002-3266-1773)
- Barbara Będowska-Sójka (ORCID: https://orcid.org/0000-0001-5193-8304)
- Vassilios G. Papavassiliou (ORCID: https://orcid.org/0000-0003-4915-3297)
- Nikolaos S. Thomaidis (ORCID: https://orcid.org/0000-0002-6796-6171)
- Alexios-Ioannis Moukas (ORCID: https://orcid.org/0000-0001-6889-9006)
- Lennart John Baals (ORCID: https://orcid.org/0000-0002-7737-9675)
- Hanna Kristín Skaftadóttir (ORCID: https://orcid.org/0000-0001-5228-8294)
- Olivija Filipovska
- Veni Arakelian (ORCID: https://orcid.org/0000-0001-5261-6948)
- Özgür Yıldırım
- Mutlu Akar
- Szabolcs Korba
- Elda Xhumari
- Joerg Osterrieder
- Maria Iannario
- Esra Kabaklarlı
- Jamal Abdul Nasir
- Ciprian-Octavian Truică
- Bálint Molnár
- Wolfgang Karl Härdle
- Christian M. Hafner
- Daniel Traian Pele
- Ioana Florina Coita
Institutions
- University College Dublin (IE)
- Eötvös Loránd University (HU)
- University of Bern (CH)
- Poznań University of Economics and Business (PL)
- Bern University of Applied Sciences (CH)
- Selçuk University (TR)
- RMIT Vietnam (VN)
- University of Oradea (RO)
- University of Iceland (IS)
- National University of Singapore (SG)
- Kaunas University of Technology (LT)
- SGH Warsaw School of Economics (PL)
- Ollscoil na Gaillimhe – University of Galway (IE)
- ZHAW Zurich University of Applied Sciences (CH)
- Charles University (CZ)
- Aristotle University of Thessaloniki (GR)
- Piraeus Bank (GR)
- Humboldt-Universität zu Berlin (DE)
- Yıldız Technical University (TR)
- Weinberg Medical Physics (United States) (US)
- Block Center (US)
- Cognition Behaviour Technology (FR)
- University College London (GB)
- Romanian Academy (RO)
- Universitatea Națională de Știință și Tehnologie Politehnica București (RO)
- University of Tirana (AL)
- University of Naples Federico II (IT)
- University American College Skopje (MK)
- University of Prishtina (XK)
- Singapore Management University (SG)
- Singapore University of Social Sciences (SG)
- Bucharest University of Economic Studies (RO)
- Hanoi University of Science and Technology (VN)
- University of Twente (NL)
- UCLouvain (BE)
- University of the Aegean (GR)
Publication Details
- Journal
- Financial Innovation
- Published
- 2026-02-09
- DOI
- https://doi.org/10.1186/s40854-025-00848-y
- Primary Topic
- Blockchain Technology Applications and Security
- Type
- article
- Field-Weighted Citation Impact
- 0.00