The collapse of the cryptocurrency market as the Fed's stress test script
01.03.19
The Federal Reserve may include a digital asset market crash scenario as one of the risks that will be considered in conducting stress test tests. The Board of Governors of the Fed noted: the collapse of the Bitcoin market can be taken into account as one of the "clearly expressed" market risks.

The ministry believes that the example of cryptocurrency should be considered as an “extreme shock”. Such situations also include such hypothetical scenarios as a war with North Korea and large losses caused by malicious actions of traders.

The Board of Governors explained that it makes the control stress tests “quite dynamic”, including various extreme scenarios. Such risks are taken into account from the moment of the creation of the tests themselves and are reviewed from time to time.

“The Board of Governors intends to continue to change the scenarios, adjusted for the risks that it deems pronounced. Control stress tests are designed to give us advanced information. It can help assess the potential effect of stressful conditions on the ability of such large banking organizations to absorb losses,” — the Fed said.

The scenarios proposed in the latest edition, if approved, will take effect on April 1.