Cryptocurrencies continue to worry proponents of traditional finance. But as contradictory opinions accumulate, an investigation by the Central Bank of the United States creates surprise and reframes things. Cryptos are no longer among the top ten potential financial risks!
Cryptos excluded from major financial risks
The battle between crypto technology and traditional finance has been raging since the advent of cryptocurrencies. If up to now the institutions have always sided with the banks, things have changed rapidly. Although traditional finance advocates continue to ignore the financial risks in the ecosystem, a Federal Reserve Bank investigation sheds light on some details.
Based in New York, it is one of 12 Federal Reserve Banks in the United States. This investigation reveals that in terms of risks, eleven factors will outweigh cryptos in 2022. She mentions among others, rising energy costs, COVID-19, geopolitical tensions and many more. According to the US Central Bank report, these concerns are frequently at the heart of debates about the US economy.
As a result, cryptocurrencies rank eleventh out of fourteen reasons for potential financial risks. Despite this year’s bear market, the data is positive and shows the enthusiasm of crypto entrepreneurs to raise awareness. Recall that the main digital assets, bitcoin (BTC) and Ethereum (ETH) have lost more than 60% of their value compared to the November 2021 peak.
However, the growth rate is staggering. Crypto assets have grown extensively over the past few years. The IMF estimates the market value of digital assets to be $2.5 trillion. This somehow reveals the substantial economic value of underlying technological advancements such as blockchain.
Although cryptos have the potential to revolutionize today’s financial system, regulators are keen on the risks they present. Despite a positive survey, the US Central Bank maintains its negative view of the ecosystem. The two main concerns remain client protection and the impact of these assets on financial stability.
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