BIS Report Flags $6‑8 Trillion Crypto Trading Volumes and Warns Earn Programs Mimic Unregulated Bank Deposits

### Context The Financial Stability Institute (FSI), part of the BIS, recently released a report analyzing cryptoasset service providers (CASPs). This analysis focused on large, diversified crypto exchange conglomerates, termed multifunction cryptoasset intermediaries (MCIs). Examples include platforms like Binance, Bybit, Coinbase, Crypto.com, Kraken, MEXC, and OKX. The report aimed to scrutinize the range of activities these intermediaries undertake within the broader financial system.

### Key Facts The report details estimated quarterly trading volumes for spot and futures crypto markets, each reaching $6–8 trillion. Furthermore, total quarterly crypto derivative volumes across all assets could exceed $24 trillion. These figures underscore the scale of activity within the crypto sector, indicating substantial market liquidity and participation.

A central concern flagged by the BIS report involves crypto "earn programs," where users transfer control of their digital assets to exchanges. In these arrangements, exchanges gain discretion to lend, trade, or otherwise utilize these assets, much like traditional banks manage deposits. However, many jurisdictions do not require these platforms to hold a banking license for such activities, creating a regulatory gap.

### What It Means This regulatory disparity allows crypto exchanges to perform bank-like functions—such as maturity and credit transformation—without the prudential requirements imposed on licensed banks. The report suggests that these activities pose risks to financial stability, particularly given the large volumes of assets involved. As these intermediaries expand their offerings, regulators face the challenge of adapting existing frameworks to address new forms of financial intermediation. Monitoring how jurisdictions globally respond to these identified risks and potential regulatory adjustments will be crucial.