Why the Treasury Department Is Worried About Cryptocurrency

The Financial Stability Oversight Council is worried about the impact of cryptocurrency on the U.S. financial system. It published a new report outlining its concerns. 

“The scale of crypto-asset activities has increased significantly in recent years. Although interconnections with the traditional financial system are currently relatively limited, they could potentially increase rapidly. Participants in the crypto-asset ecosystem and the traditional financial system have explored or created a variety of interconnections. Notable sources of potential interconnections include traditional assets held as part of stablecoin activities. Cryptoasset trading platforms may also have the potential for greater interconnections by providing a wide variety of services, including leveraged trading and asset custody, to a range of retail investors and traditional financial institutions. Consumers can also increasingly access cryptoasset activities, including through certain traditional money services businesses,” the report says. 

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