According to a research from the Bank for International Settlements, cryptocurrency assets, which were promoted as the financial industry's future, have not only fallen short of their promises but are also raising financial risks in emerging markets.

The study examines potential financial stability issues that could arise if cryptocurrency and traditional financial markets were to become more interwoven in the future, arguing that cryptoassets "should be assessed from a risk and regulatory perspective like all other assets."

The dangers are numerous, and the nature, structure, composition, and function of those markets all contribute to the vulnerabilities of cryptoassets.

"Cryptoassets hold out the illusory appeal of being a simple and quick solution for financial challenges" especially in emerging markets, but "have so far not reduced but rather amplified the financial risks in less developed economies," the BIS report showed.

The study suggests that national authorities might work together to establish the information they require to successfully monitor the market, "with an emphasis on the identification of critical connections points with financial institutions and core market infrastructures."

However, this has transparency requirements that go against the secrecy that certain individuals and organizations seek in crypto assets.

"Given the offshore and pseudo-anonymous nature of cryptoasset markets, an outright ban might not prove enforceable," read the BIS paper.

"On the contrary, policymakers would lose all sight of these markets, making these markets even less transparent and predictable. In addition, all potential innovation gains from cryptoasset markets would be lost."

Bans, confinement, and regulation are among the recommendations included in the research for governing and monitoring the markets for cryptoassets.

About two dozen central banks across emerging and advanced economies are expected to have digital currencies in circulation by the end of the decade, according to a BIS survey published last month and conducted late last year.