The US Federal Reserve issues a warning, urging that measures may need to be taken in the future to prevent financial instability if more money is invested in Bitcoin.
The US Federal Reserve has issued a warning stating digital currencies, specifically Bitcoin, pose “financial stability risks.” The news preceded a 10% reduction in Bitcoin’s price on Friday, which has since recovered over the course of the weekend to resume all-time high levels as the price hovers in the region of $11,000. The warning was prefixed by a statement citing that digital currencies, such as Bitcoin, do not yet pose major concerns at their current levels of use.
Randy Quarles, the Fed vice-chairman of supervision, said:
More serious financial stability issues may result if they achieve wide-scale usage. (Digital currencies are a) niche product that sometimes garners large headlines. (It) has no intrinsic value, is not the liability of a regulated banking institution, and in leading cases, is not the liability of any institution. Indeed, how to treat and define this new asset is complicated.
US Dollar Reliance?
Randy Quarles went on to say that an economic system could be greatly challenged by liquidity and credit risks brought about …
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