Bitcoin BTC , ethereum and other “fast evolving” cryptocurrencies could soon become a threat to global financial stability, according to the chair of an international body tasked with shoring up the financial system.
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The bitcoin price has ballooned over the last two years, surging from around $10,000 per bitcoin to almost $70,000 late last year. Ethereum, the second-largest cryptocurrency has, likewise rocketed higher—boosted by the surging popularity of so-called decentralized finance (DeFi), a blockchain-based alternative financial system.
The price of both bitcoin and ethereum have since crashed back, losing around 40%, and dragging down the wider crypto market that’s lost more than $1 trillion in value in less than six months.
Want to stay ahead of the market and understand the latest crypto news? Sign up now for the free CryptoCodex—A daily newsletter for crypto investors and the crypto-curiousMORE FROM FORBES’Many Single Points Of Failure’-Twitter Founder Jack Dorsey Issues Stark Ethereum Warning Amid Price VolatilityBy Billy Bambrough
The price of bitcoin and ethereum have rocketed higher over the last two years, helping to make the … [+] fledgling crypto market worth almost $2 trillion.SOPA Images/LightRocket via Getty Images
“Crypto-asset markets are fast evolving and could reach a point where they represent a threat to global financial stability due to their scale, structural vulnerabilities and increasing interconnectedness with the traditional financial system,” Klaas Knot, a Dutch central banker and the chair of the Financial Stability Board, wrote in an open letter this week, warning the finance ministers of the Group of 20 top economic powers that global financial stability cannot be taken for granted.
Knot, who in February called for “urgent” action to rein in the red-hot crypto market, pointed to Russia’s invasion of Ukraine as exacerbating the threat from bitcoin, ethereum and other cryptocurrencies.
“The Russia-Ukraine war has reinforced pre-existing concerns about the growth and potential illicit use of crypto-assets,” Knot wrote, adding “There is no room for complacency.”
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The bitcoin price has soared many thousands of percent over the last few years, making bitcoin, … [+] ethereum and other major cryptocurrencies multi-billion dollar assets.Coinbase