In this note, we present findings from an online experiment that explored the impact of regulation on consumers’ behaviour and beliefs in the context of regulating cryptoassets.
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Read the Research Note annex (PDF)[3]
Effective regulation of new products requires understanding its impact on consumer behaviour and beliefs, which can be complex and far-reaching, potentially influencing demand, perceptions of protection, and trust. This note summarises findings from an online experiment on regulating cryptoassets, examining how different levels of information about regulatory status of cryptoassets and the protections that regulation may provide affect consumers’ decisions and beliefs.
Four regulatory scenarios were tested:
- Current state: Cryptoassets are described as ‘unregulated’, with no extra product or protection information.
- Future state 1: Cryptoassets are ‘regulated’, but no details about protections or cryptoassets are given.
- Future state 2: Cryptoassets are ‘regulated’, with additional information about regulatory protections.
- Future state 3: Cryptoassets are ‘regulated’, with both extra information about the potential protections under regulation and comprehensive product information about cryptoassets (risks, rights, obligations, technology).
The study used a hypothetical investment task and a survey, randomly assigning participants to different scenarios to examine how information influenced investment behaviour and beliefs.
Authors
Cameron Belton, Jesal D. Sheth, Colin Higgins, Isaac Keeley, Krishane Patel, Jackie Spang.
Disclaimer
Research notes contribute to the work of the FCA by providing rigorous research results and stimulating debate. While they may not necessarily represent the position of the FCA, they are one source of evidence that the FCA may use while discharging its functions and to inform its views. The FCA endeavours to ensure that research outputs are correct, through checks including independent referee reports, but the nature of such research and choice of research methods is a matter for the authors using their expert judgement. To the extent that research notes contain any errors or omissions, they should be attributed to the individual authors, rather than to the FCA.