Four cryptocurrencies have been added to the Federal Reserve Bank of St Louis, one of twelve regional banks in the US central banking system. The four cryptocurrencies are Bitcoin, Litecoin, Bitcoin Cash and Ethereum. The fact that a US Federal reserve bank recognizes cryptocurrency is highly significant.
A Significant Addition
Daily prices are now available on these four cryptocurrencies from the Federal Reserve Economic Database (FRED). FRED is maintained by the Federal Reserve Bank of St. Louis. This is one of the most highly regarded sources for economic data available, and it is significant that a reserve bank has added cryptocurrency. FRED is also seen as an essential indicator of legitimacy. The data for the prices are taken from Coinbase, the biggest and most closely watched exchange in the USA.
From a utility perspective, the addition to the FRED database is more than welcome. There has been little integration between cryptocurrency products and prices with other trade analysis tools. FRED is known for being very flexible and user-friendly and has a large user base within the financial community. Much of the cryptocurrency data is currently pulled from Coinmarketcap.com, which surprised users in January with a change in its algorithm. FRED will assist analysts in their trades and bring some cohesion to the scrutiny of cryptocurrency products.
Wall Street traders have been able to access bitcoin prices since 2014 via Bloomberg terminals, and Goldman Sachs has opened a Bitcoin derivatives trading desk. However, the cryptocurrency trading infrastructure is woefully underdeveloped due to a previous lack of legitimacy.
Another Central Bank Recognizes Cryptocurrency
Many are saying that cryptocurrency is now officially legitimate. While cryptocurrencies are frequently used by civilians as a medium of exchange, they have not been given the seal of approval from central banks. But it is also worth noting that two days after the Federal Reserve Bank of St Louis legitimized the four cryptocurrencies, Mark Carney would give a speech on the benefits of distributed leger technology and indicate it would be used for England’s payment infrastructure. Carney would go on to state that “No longer will access to central bank money be the exclusive preserve of banks” in his speech.
Mark Carney is the governor of the Central Bank of England, and before his speech, he was known for his hostility towards cryptocurrencies. The speech denoted a sharp turn from previous statements. It appears that the Central Bank of England and the central banking system in the USA have both given a surprising green light to cryptocurrencies, within two days of one another.
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Law graduate with 3 years experience as a consultant in the capital markets industry and 4 years experience freelancing on UpWork as a Creative Writer.