Fed targets crypto assets for the first time in its review of financial risk
It reflects greater risk-taking by investors, according to their analysis
The US Federal Reserve (Fed) has for the first time highlighted rising crypto-asset prices in its overall assessment of the stability of the financial system, saying it reflects increased risk-taking by investors.
The brief comment, contained in the Fed's semi-annual Monetary Policy Report to Congress released Friday, is the latest sign that policy makers are paying more attention to what used to be a small slice of the financial system.
The price of Bitcoin has risen around 250% from a year ago, although it is well below its April high.
Powell has previously said that he wants the Fed to play "a leading role" in developing international standards for digital currency. The central bank plans to release a discussion paper this summer highlighting the risks and benefits of digital payments.
In the Monetary Policy Report, the Fed said that some parts of the financial system had become more vulnerable to potential instability since its last report to Congress in February, but that the core of the system remained resilient. "Rising prices for a variety of crypto assets also partly reflect an increased appetite for risk," he added.
The central bank also issued a warning about the general level of asset prices.
Translated by Caoimhe Toman