Fed increase focus on crypto; warn banks of liquidity risk
Federal Reserve, SEC and other regulatory bodies unrelenting interest on crypto related assets calls for concern in the crypto space and needs to be addressed with detail clarity, we have seen major headlines where several agencies calls for regulating Stablecoin which used to be a safe haven for most crypto investors during high market uncertainties, stablecoin have been recognized as none security asset for investors by the U.S Security Exchange Commission (SEC), high prolific crypto enthusiasts have call users attention stating these moves by SEC is uncalled for and only deters crypto adoption.
A new release statement by the U.S Fed Reserve have highlighted risk bank could likely expose themselves to when they continue dealing with crypto assets stating.
Crypto volatility are very dangerous as highlighted in it statement drawing concern on terra stablecoin UST de-pegging, investors relied on an algorithm stablecoin that did wiped out million from the market, claiming these coins are not backed by any physical reserves for insurance purposes.
It also calls on banks to be on the lookout for crypto companies that misleadingly represent deposit status to avoid reoccurriance of Digital voyager, Celcius that went bankrupt for funds mismanagement.
“Certain sources of funding from crypto-asset-related entities may pose heightened liquidity risks to banking organizations due to the unpredictability of the scale and timing of deposit inflows and outflows,” the statement said.
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Fed's are doing their best to see its monetary policies are not been deregulated I can understand from point of view that the Fed are doing their best to protect their customers/investors this isn't a bad call.