Federal Reserve Governor Lael Brainard said the central bank is monitoring the “extreme volatility” of cryptocurrency prices, particularly bitcoin, but does not believe virtual currencies pose a current threat to U.S. financial stability.
Brainard made the remarks April 3 during a speech at the Stern School of Business in New York, where she warned investors to be cautious about “highly speculative” asset classes such as cryptocurrencies, and said the Fed will continue to study them.
Brainard continued: “As in other highly speculative markets, individual investors should be careful to understand the possible pitfalls of these investments and the potential for losses. But it is less clear how the valuations of cryptocurrencies currently could pose a threat to financial stability. Nonetheless, we will continue to study them.”