Fed "Cryptocurrency Price Increase Reflects Investors' Risk Appetite"

[Photo by Reuters Yonhap News]

[Asia Economy Reporter Byunghee Park] The U.S. central bank, the Federal Reserve (Fed), has stated that the rise in cryptocurrency prices partially reflects increased risk appetite among investors.

According to Bloomberg News, the Fed analyzed this in its semiannual monetary policy report submitted to Congress on the 9th (local time). This is the first time the Fed has mentioned cryptocurrency in its semiannual monetary policy report, indicating that the Fed has begun to pay attention to cryptocurrencies.

Bloomberg also reported that Fed Chair Jerome Powell met with Brian Armstrong, CEO of Coinbase, a cryptocurrency exchange listed on Nasdaq, on May 11.

In the monetary policy report, the Fed stated, "Since the congressional report in February, parts of the financial system have become more vulnerable to potential instability," but added, "The core financial system remains strong." Regarding asset prices, it pointed out, "If investors' risk appetite weakens, interest rates rise suddenly, or economic recovery is delayed, there could be significant downside vulnerability."

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