Lael Brainard, an American economist and also member of the Federal Reserve’s board of governors called bitcoin and other cryptocurrencies out for their “extreme volatility” on Tuesday.
Lael Brainard however, made it clear that the new asset class does not pose a threat to the stability of the U.S. economy.
She told an audience in New York City:
“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 said that cryptocurrency markets “may raise important investor and consumer protection issues, and some appear especially vulnerable to money-laundering … concerns.” Brainard further cautioned individual investors to be aware of the “possible pitfalls of these investments and the potential for losses.”
On the other hand, Brainard argued that cryptocurrencies were unlikely to “pose a threat to financial stability,” given that the assets are not commonly used in payments and there is little evidence that investors have borrowed large amounts of money to invest in them.
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She also revealed that the Fed will continue to pay constant attention to Cryptocurrency to make sure it doesn’t somehow someway affects the country’s economy.
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