Bitcoin collapse can be included in the list of scenarios of stress tests of the Fed

The scenario of the collapse of the cryptocurrency market may be included in the list of risks that the US Federal Reserve will take into account when conducting control stress tests. This writes CoinDesk .

Changes in the scheme of such testing, the Board of Governors of the Fed announced on Thursday, February 28. In a statement, the Fed, in particular, noted that the “collapse of the Bitcoin market” could be considered as one of the actual market risks.

The recommendation to include an amendment that would include a cryptocurrency was proposed in one of the comments on the document. Its author believes that the collapse of the Bitcoin market should be considered as one of the “extraordinary shocks”. Among them, he also referred to such hypothetical situations as the war with North Korea and major losses as a result of the malicious actions of traders.

The Board of Governors of the Fed also stated that it intends to make the control stress tests “quite dynamic” by including other distinct market risks. Among the most recent scenarios added to such tests were, for example, drastic changes in oil prices and recession in the euro area.

"Control stress tests are designed to provide managers and boards of directors of companies, the public and regulators with predictive information, and whose help can be used to evaluate the potential effect of stressful conditions on the ability of large banking organizations to absorb losses while fulfilling their obligations to creditors and other counterparties and continuing to carry out its activities in the field of lending, ”the Fed says in the document.

If the scenarios proposed in the document are approved, they will be put into service as early as April 1.

Recall that last summer, Fed Chairman Jerome Powell made several critical statements about Bitcoin and other cryptocurrencies. In particular, he said that cryptocurrencies are great for money laundering, as well as being a bubble attractive to inexperienced investors.

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