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Bank of Italy Warns of Systemic Cryptocurrency Risks and Power Concentration During Trump Era

Bank of Italy Warns of Systemic Cryptocurrency Risks and Power Concentration During Trump Era

The Bank of Italy has warned of the increasing threat posed by cryptocurrencies and the close relationship between the Trump administration and the sector.

The Italian central bank cautioned that the link between cryptocurrencies and traditional finance could lead to market instability.

It pointed out that Trump's promotion of crypto assets could pose threats to markets and intermediaries.

Despite this, Italy's largest commercial bank made investments in Bitcoin in January.

The Bank of Italy reiterated long-standing concerns about the growing influence of cryptocurrencies in traditional finance, even as the largest commercial bank in the country accelerated its push towards digital assets.

In its latest report on financial stability, published on Monday, the Bank of Italy, or Banca d'Italia, noted the increasing global integration of cryptocurrencies as a potential threat to financial stability.

For years, central banks around the world have issued nearly identical warnings about the systemic risks posed by the growing links between cryptocurrencies and traditional finance, citing volatility and regulatory gaps.