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WorldApril 3 2018

Crypto mania: how central banks are responding to a new threat

Cryptocurrencies have been making the headlines in recent months as their values soar and crash. But what threat to they pose to national and global financial systems? Stefanie Linhardt talks to central bankers about their response.
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Bitcoin and other cryptocurrencies have turned the financial market on its head. Once a phenomenon only for the very tech savvy, cryptocurrencies or 'crypto assets', as many central bankers prefer to call them, are now pulling in an ever larger following across the globe.

But in the wake of the astronomical rise in Bitcoin prices  and the subsequent fall in recent months, cryptocurrencies are being viewed with increasing scepticism and concern by authorities and financial institutions. So far, the main concern is the consumer, followed by reservations over potential anti-money laundering and counter-terrorist financing violations. But do crypto assets pose a risk to financial stability? And how should this relatively new technology be dealt with? Embrace it? Tolerate it? Regulate it? Ban it?

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