Federal Reserve Board Member Criticized Cryptocurrency Volatility
April 5, 2018
Lael Brainard, a member to the US Federal Reserve Board has picked up sharply Bitcoin and altcoins for high volatility having marked, they are no threat for financial health of the US. The claim was made during her speech in New York.
“One area that the Federal Reserve is monitoring is the extreme volatility evidenced by some cryptocurrencies. For instance, bitcoin rose over 1,000 percent in 2017 and has fallen sharply in recent months”, she noted.
According to Brainard, current situation on the crypto markets is the cause of risks for investors’ and citizens’ security. On top of it, they are subject to problems of money laundering. She has warned individual investors, these problems may turn to be a trap for them and result in funds loss.
She has also mentioned cryptocurrencies are quite unlikely to carry a threat for the US financial solvency. Low danger level of cryptocurrencies, as she put it, is a result of them being uncommon payment means while investors avoid putting up loan capital into digital currency.
Brainard has made it a point, the Federal Reserve has got no clear-cut idea of cryptocurrency markets for they are in the state of uncertainty, but added, the agency will continue studying them.
Note that Randal Quarles, Vice Chair of Federal Reserve used to voice a contrary idea in December, saying that cryptocurrencies threaten the financial system.