Federal Reserve Researchers Suggest Crypto As Separate Derivatives Class

Federal Reserve researchers have suggested that cryptocurrencies be treated as a distinct asset class in derivatives markets. Analysts said in a recent study that the price movements of cryptocurrencies are very different from those of conventional assets like equities or commodities, particularly when the market is under stress.

According to the report, digital assets should be separated into two groups: floating cryptocurrencies, whose values fluctuate freely, and stablecoins, which are based on conventional currencies. The authors claim that using the same risk models for both groups could result in understated volatility and improperly calibrated margin requirements.

The idea may lead to more stringent and customized collateral requirements for trading cryptocurrency derivatives if it is accepted by market players. The document is not a formal rule, though. It reflects research by Fed staff and would require industry adoption or formal rulemaking to take effect.

The proposal highlights growing institutional attention to crypto risk management as digital assets become more connected to traditional finance.

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