What do experts say about the Fed's report on cryptocurrencies?

What do experts say about the Fed’s report on cryptocurrencies?

Bank report issuedto the Federal Reserve The highly anticipated cryptocurrency issue on Thursday revealed the costs and benefits of the government-issued digital currency, but postponed a final decision on whether to move forward.

Instead, the Federal Reserve gives the public and other stakeholders until 20 May to share their input before further action is taken.

Unlike cryptocurrencies, which are usually created within the private sector and regularly experience large price fluctuations, central bank digital currency (CBDC) it will be digital form of money Published and supported US Central Bank.

However, any move the Fed takes after that could “Cryptocurrency strengthens or devaluesAccording to Grant Maddox(Certified and Founded Financial Planner Hampton Park Financial Planning Headquartered in South Carolina). Dedicated: “It depends on which direction our government chooses to take“.

It was Fed It is clear in the report, and it will not proceed with issuing the central bank digital currency CBDC Without clear support from the executive branch and from Congress .

Try fed to be “politically intelligent“Because it works to create digital dollar, says the head of North American public policy for the encrypted data company Chainalysis Chainalysis، “Salman Banai“.

And if it is taken Federal Reserve Board a clear position on this matter.”He would have gotten a lot of political opposition“.

Cryptocurrencies…What do experts say about the Fed’s report on cryptocurrencies?

Bitcoin and Ethereum drop after the release of the report

Hours after the report was released, both Bitcoin and Ethereum Below historical record prices for the second time this month. The prices of the two cryptocurrencies have not been so low since July.

Banai says:

“There are two main factors affecting the demand for cryptocurrencies now: their value as an inflation hedge and their value as a risky asset.. The perceived probability of crypto’s future goes up or down based on regulatory risks as well.“

Here’s what experts are saying about the report released this week, and what investors should understand.

Read also: “The US Federal Reserve issues “detailed plans” for the digital dollar soon

What experts say about the Fed’s report؟

– “Salman“Salman Banaei
(Head of North American Public Policy for the encrypted data company Chainalysis)

Says “Weaving“:

“What surprised me was how serious it was Fed in dealing with an idea Central Bank Digital Currencies. The cryptocurrency industry is waiting for it to happen.

Infrastructure created to support can crypto industry Merge central bank currency CBDC easily at existing providers. But the CBD timeline will be much longer, I think it will take two to four years before we get another major milestone.”

– “Laura Sheen” Laura Shin

(Air hostess “ Unchained Broadcast” Unchained Podcast and author of a book “Cryptopians”)

In her view, it is not surprising that the Federal Reserve is exploring a central bank digital currency because the technology”Blockchain” blockchainAlthough it is still under development, it is It has many advantages over our current analog systems. Additionally, it can help U.S. dollar in maintaining the status of the global reserve currency.

It already seems that China may try to use its digital yuan to reduce the status of the US dollar as the global reserve currency.

Nor is it surprising that the Fed is not ready to announce any decision, but is currently seeking comments, because Central bank digital currency raises a lot of questions about security and privacy, In addition to that It has the potential to disrupt existing financial institutions.

– “Grant Maddox“Grant Maddox

(Founder Hampton Park Financial Planning)

Says “Maddox“: “They line up with the likes of China and others who have come forward with “Blockchain.” US digital currency may allow faster payments to foreign allies, improving our geopolitical outlook“.

This move could improve monetary policy decisions by allowing for easier distribution. We will join about 90 Another country to review this option. It could also add more complexity to our global markets and distract from the dollar.

– “Chris Chen“Chris Chen

( Founder Insight for Financial Strategies Insight Financial Strategists)

Believes “chin” I have “Blockchain“A lot of apps that don’t have to be currency, so there are still a lot of things to do in the private sector.

“I firmly believe that no self-respecting government will relinquish control of its currencies to a private entity.

Governments need to retain control of the money supply andinterest rates. Like it or not, these are key tools for managing economies. The United States is not the only country considering digitizing its currency. China is on its way as well, and so are a number of other countries.”

What does the report mean for cryptocurrency investors?

While there likely won’t be any immediate changes that crypto investors should make based on this week’s Federal Reserve report, it is a good reminder that policy makers are paying attention to how perceptions of cryptocurrency are shaped.

Says chin:

“The move by the Federal Reserve means that people who have been thinking of cryptocurrency as physical, their bubble will burst. many types Bitcoin He thought it was a currency and that it would replace traditional currencies.”

Final tips

The basics of investing in cryptocurrency remain the same. Experts say you should stick with the two biggest cryptocurrencies, Bitcoin AndEthereumInvesting what you do not agree to except in a loss or no more than 5% of your total portfolio.

Always prioritize important aspects of your money, such as saving for emergencies, paying off high-interest debt, and saving for retirement, over cryptocurrency investments.

As for where you buy and trade cryptocurrency, stick to a major high-volume cryptocurrency exchange, such as Coinbase or “Jiminy“Gemini, which proactively aligns with cutting-edge federal regulators.