• Dapps:16.23K
  • Blockchains:78
  • Active users:66.47M
  • 30d volume:$303.26B
  • 30d transactions:$879.24M
The US Federal Reserve System and its impact on cryptocurrency

The US Federal Reserve System and its impact on cryptocurrency

user avatar

by Alexandra Smirnova

2 years ago


The Federal Reserve System (FRS) of the United States, often referred to as the Federal Reserve System or simply the FRS, is the central bank of the USA and one of the most influential financial institutions in the world. Its role and influence on the global economy are hard to overstate. However, with the emergence of cryptocurrencies such as Bitcoin, Ethereum, and others, there is a need to understand how the FRS interacts with these new forms of money and what impact it has on their development.

Contents:

The Federal Reserve System (FRS) of the USA and its impact on cryptocurrency - news

The Role of the FRS in the Economy

Before we delve into the question of how the FRS influences cryptocurrency, let's briefly consider the role it plays in the American and global economy. The FRS was established in 1913 and has been assigned numerous functions:

  • Price stability;
  • Maximum employment;
  • Promotion of sustainable economic growth.

To achieve these goals, the FRS uses monetary policy by regulating the money supply and managing interest rates.

Interest in Cryptocurrencies

With the advent of cryptocurrency development in the early 2010s, the FRS and other central banks worldwide began monitoring these new assets. Cryptocurrencies are digital or virtual currencies that operate on blockchain technology. They offer a new way of transferring and storing value that is independent of traditional financial institutions and government currencies.

Interest from investors and entrepreneurs in cryptocurrencies has grown each year, and they have become the subject of extensive debates in global economic circles.

However, cryptocurrencies have also raised concerns among authorities due to their potential use in illegal activities, including money laundering and terrorism financing.

The Influence of the FRS on Cryptocurrency

Now, let's take a closer look at how the FRS influences cryptocurrency:

Aspect Description
Monetary Policy The FRS regulates the money supply and sets interest rates. These instruments can impact investment decisions and demand for cryptocurrencies. For example, a reduction in interest rates can make cryptocurrencies more attractive to investors in search of higher yields.
Regulation and Legislation The FRS also influences the regulation of the cryptocurrency market. It collaborates with other regulators, such as the SEC and CFTC, to develop rules and regulations for cryptocurrency exchanges and companies. This can affect the availability and legality of cryptocurrency operations.
Global Economic Stability As the US dollar is a global reserve currency, the FRS's policies also impact the global economy. For example, changes in money supply and interest rates can affect cryptocurrency exchange rates against the US dollar and other global currencies.
Institutional Investments The growth of interest in cryptocurrencies among institutional investors may be related to FRS policy and the overall economic environment. Institutional investments can influence the cryptocurrency market's structure and volatility.
Crises and Instability Occasionally, global financial crises and economic instability can intensify interest in alternative assets, including cryptocurrencies. In such situations, FRS decisions and comments can have a significant impact on the cryptocurrency market.

 

The Federal Reserve System of the United States exerts significant influence on the cryptocurrency market through its monetary policy, regulation, and impact on the global economy. At the same time, cryptocurrencies represent a new challenge for the FRS and other central banks, requiring constant monitoring and adaptation to changing circumstances. In the future, the relationship between the FRS and cryptocurrencies may continue to evolve, and their interaction will remain an important topic for study and analysis in the global economy.

0

Share

Other articles

Rarimo — Decentralized ZK Registry and Next‑Gen Identity Passport

Rarimo is a ZK-powered identity registry enabling private, portable Web3 identities with zero-knowledge proofs, cross-chain interoperability, and modular decentralized infrastructure.

user avatarElena Ryabokon

15 hours ago

Partior: Inside the Blockchain Platform for Bank Payments and Liquidity

Partior is a blockchain-based settlement platform designed to tokenize deposits, streamline cross-border payments, and connect banks through real-time infrastructure.

user avatarElena Ryabokon

18 hours ago

Bleap Finance: A Web3 Bank with Card, Cashback, and DeFi Yield

Bleap is a Web3 bank offering a crypto card, stablecoin yield, zero fees, and self-custody — all without seed phrases, built on Arbitrum and ERC-4337.

user avatarElena Ryabokon

a day ago

In-Depth Overview of LSP.Finance — DeFi, Liquid Staking, Token Utility & Ecosystem

Comprehensive analysis of LSP.Finance: architecture, tokenomics, staking mechanics, liquid assets, and development roadmap within the Arbitrum and Web3 ecosystem.

user avatarElena Ryabokon

a day ago

In-Depth Look at BLIFE Protocol — Reputation, Tokenomics, and Web3 Built on Bitcoin

Comprehensive review of BLIFE Protocol: digital identity, tokenomics, BPR reputation system, and a Web3 ecosystem built on Bitcoin. Architecture, vision, and real-world use cases.

user avatarElena Ryabokon

2 days ago

OverKnights: A Blockchain Card Battler with Mechs, NFTs, and PvP Strategy

OverKnights is a tactical Web3 card game featuring NFT mechs, 1v1 PvP battles, and deep customization, built on Immutable zkEVM and part of the expanding OverNet ecosystem.

user avatarElena Ryabokon

2 days ago

dapp expert logo
© 2020-2025. DappExpert. All rights reserved.
© 2020-2025. DappExpert. All rights reserved.

Important disclaimer: The information presented on the Dapp.Expert portal is intended solely for informational purposes and does not constitute an investment recommendation or a guide to action in the field of cryptocurrencies. The Dapp.Expert team is not responsible for any potential losses or missed profits associated with the use of materials published on the site. Before making investment decisions in cryptocurrencies, we recommend consulting a qualified financial advisor.