I think you're remembering incorrectly. Crypto is large, but nowhere near large enough to cause contagion risk, especially because nobody is stupid enough to lever against it as though it was a AAA asset (like they did for American mortgages). If every single cryptocurrency was zeroed tomorrow, the global economy would shrug and move on.
Quite possible. The closest I can find is [1] (via [0]), which upon re-reading suggests the cryptoverse, not the global economy, would blow up. Perhaps I'm conflating it with the general warnings of the era [2,3,4].
Though I swear I recall reading some ominous wording, pointed out by another commenter, that subtly suggested the decision to quietly settle vs. aggressively prosecute was based on billions of dollars of potential economic fallout. Other articles [2,3,4] talk about contagion risk, but none are exactly what I recall. Funny how memory works!
One almost hopes it happens solely to shut up the crypto bros that still refuse to accept the primary use case for crypto is scams.
Sure it can be a distributed concencus/ledger system/smart contract system almost no one important needs or will use, or will reuse the idea internally themselves if it's useful.
Anything important won't be built on something they can't control or manage. Crypto by definition is that. So you have to really consider what this built on it and who's profiting from it.
Arguably the crypto blowup last year did result in some contagion, being one of the triggers for the US’s recent Medium Sized Bank Crisis. Though, also, arguably that was coming anyway, one way or another.
I think the 2023 bank crisis proves the opposite of what you're claiming. Only 3 banks failed, and of those three one had nothing to do with crypto. It was not a contagion, and people predicting it would have widespread repercussions on the economy turned out to be wrong.
"No contagion risk" doesn't mean nobody would be harmed by a crypto collapse; obviously there are a handful of morons here and there who would get wiped out. It means there is no systematic, widespread dependency of the real economy on the crypto one. I think the bank failures bear that out.
