CFTC Commissioner Compares Crypto Contagion Risk to 2008 Financial Crisis
Commissioner warns that vulnerabilities seen in crypto markets are similar to those seen during the global financial crisis and asks that the agency receives additional authoritative information.
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Christy Goldsmith Romero of the Commodity Futures Trading Commission (CFTC) cited the collapse of the Terra ecosystem and its ripple effects as an example of how contagion risks within crypto markets are similar to those faced by traditional finance (TradFi) during the 2008 Global Financial Crisis (GFC).
Romero suggested in a speech at the International Swaps and Derivatives Association (ISDA) Crypto Forum on October 26 that increased ties between crypto markets and TradFi increase the risk posed by crypto to overall financial stability, noting:
"The market for digital assets remains relatively small and contained compared to the level of systemic risk that would come with greater scale or interconnections with the traditional financial system. But that may not be the case in the future. close, especially given the growing interest in traditional finance.”
One area of TradFi that the commissioner would prefer to stay away from crypto is retirement and pension funds. This opinion was probably influenced by recent events in the UK, where pension fund problems necessitated the intervention of the Bank of England.
I have serious concerns about pensions and retirement funds investing in #Cryptocurrency
— Commissioner Christy Goldsmith Romero (@CFTCcgr) October 27, 2022While Romero warns the US not to rush regulations, she supports a "s...
Commissioner warns that vulnerabilities seen in crypto markets are similar to those seen during the global financial crisis and asks that the agency receives additional authoritative information.
New
Christy Goldsmith Romero of the Commodity Futures Trading Commission (CFTC) cited the collapse of the Terra ecosystem and its ripple effects as an example of how contagion risks within crypto markets are similar to those faced by traditional finance (TradFi) during the 2008 Global Financial Crisis (GFC).
Romero suggested in a speech at the International Swaps and Derivatives Association (ISDA) Crypto Forum on October 26 that increased ties between crypto markets and TradFi increase the risk posed by crypto to overall financial stability, noting:
"The market for digital assets remains relatively small and contained compared to the level of systemic risk that would come with greater scale or interconnections with the traditional financial system. But that may not be the case in the future. close, especially given the growing interest in traditional finance.”
One area of TradFi that the commissioner would prefer to stay away from crypto is retirement and pension funds. This opinion was probably influenced by recent events in the UK, where pension fund problems necessitated the intervention of the Bank of England.
I have serious concerns about pensions and retirement funds investing in #Cryptocurrency
— Commissioner Christy Goldsmith Romero (@CFTCcgr) October 27, 2022While Romero warns the US not to rush regulations, she supports a "s...
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