Cato Institute, the American libertarian think tank headquartered in Washington, D.C., has emphasized what pushing Bitcoin and crypto away could mean to the states. According to them, this would be a strategic mistake for the U.S. across multiple domains.
Read CRYPTONEWSLAND onThis concern comes amid U.S. regulators, the Federal Reserve, the FDIC, and the Office of the Controller of the Currency statement encouraging banks that use funding from crypto firms to monitor liquidity and maintain strong risk management practices to prevent runs.
Market analysts have commented on this. JPMorgan analyst Steven Alexopoulos for instance, says the joint statement from the Fed and others indicates increased regulatory concerns around the risks of serving the crypto industry and will likely limit banks’ usage of these deposits in terms of deploying into loans and held-to-maturity securities.
This statement warns that deposits the banks host from crypto firms could be impacted by periods of stress in markets, volatility, and outside factors over which crypto firms have no control. The agencies additionally encouraged banks to use existing risk management tools to guard against runs, but they still needed to create and require new risk management rules.
On the same accord, Ben Armstrong tells Twitter that the VAST majority are too pessimistic about crypto regulation. He says that It’s very Low IQ to believe the United States will allow the rest of the world to blow past us in a Finance Niche.
Atlanta Fed President Rafael Bostic on his hand says that he hopes crypto doesn’t replace the proven components of the traditional payment and banking systems. In conversation with former Kansas City Fed President Esther George at the Atlanta Fed, Bostic agreed with George’s comments that she does not see cryptocurrencies supplanting some of these more tired and true rails.
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