In a collective statement, the US Federal Reserve (FED), Federal Deposit Insurance Corporation (FDIC), and Office of the Currency Controller (OCC) warned the banking industry of the serious liquidity risks of the cryptocurrency market.
Fed, FDIC and OCC Banks were warned about the liquidity risks of cryptocurrencies. In the joint statement of the institutions, crypto firms bank deposits may be unstable and even if a company itself is stable, it is driven by the dynamics of the crypto industry. that it may be disrupted place was given.
In particular, institutions that have warned banks that crypto poses significant liquidity hazards tend to sway lenders in general. invited to move away from digital assets:
Such markets and deposits have a fragile structure that can be easily affected by events, media movements or uncertainty. As there can be fast asset entries, fast exits are also easily possible. When a banking institution’s deposit funding base is concentrated in highly interconnected crypto-asset-related institutions, deposit fluctuations can increase liquidity risk.
Pointing out the crises in the crypto money industry in the last year and FTX exemplary of its bankruptcy, regulators have had significant issues regarding business models that focus on crypto-asset-related activities. safety and soundness concerns He added that he was present.
This warning is given to banks by the institutions in question. Not the first warning. Finally, the institutions that came together in the first days of January issued a comprehensive warning against the risks of cryptocurrencies. traditional finance convergence of the crypto industry with “worrying” described it as.