Federal Reserve No Longer Considers Crypto a Major Threat to the US Economy
The US Federal Reserve no longer considers crypto assets as one of the most prominent threats to the US economy.
There is still a lot of skepticism toward cryptocurrencies from the US central bank. However, crypto is no longer in the top 10 risks of the US economy. Instead, Russia’s invasion of Ukraine, increasing inflation, cyber-attacks, tensions with China, and other potential risks are more potentially harmful to the US economy rather than cryptocurrencies.
In a recent survey conducted by the FED, cryptocurrencies are 12th in the most-cited potential risks in the coming 18 months. While still presumably considered a threat, cryptocurrencies are no longer in the top 10 rankings in terms of harming the US economy, according to the US Federal Reserve Bank of New York.
Here is the full list of the 14 most-cited potential risks to the US economy according to the FED:
Of course, given the magnitude that the tensions between Russia and Ukraine have created oversee all other factors. With that in mind, these events had a domino effect on other factors. That includes an increase in energy prices, which is in the top 5 risk factors to the US economy as per the Central Bank.
Federal Reserve Still Not Pro Crypto
Nonetheless, Central Banks are still against the decentralized means of payment that cryptocurrencies promote. The Federal Reserve made sure to suggest that most major cryptocurrencies have plummeted in value throughout 2022. Hence, making them risky and highly speculative investments.
Moreover, the recent report also mentions the crash of the Terra ecosystem, indicating that cryptocurrencies are not stable and can lead to bankruptcy.
Not just in the US, but Central Banks globally are not very crypto-friendly yet. Instead, to tackle digitalization, various central banks are working on Central Bank Digital Assets (CBDCs). However, crypto proponents are against the idea of a centralized digital currency as that defeats the whole purpose of cryptocurrencies.
India became the latest country to introduce CBDCs. Nine Indian traditional banks are working on the implementation of CBDCs. Turkey is also working on CBDCs while being heavily against cryptocurrencies.