- Along with other central banks, the US Federal Reserve is working jointly.
- This concerted move aims to boost liquidity via the standing U.S. dollar liquidity swap line arrangements.
- The cryptocurrency community is optimistic about this move.
The cryptocurrency community is once again optimistic following a March 19 announcement by the Federal Reserve. The statement highlights the Fed`s efforts to support the economy by collaborating with other central banks: the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank.
This coordinated action’s alleged primary objective is to strengthen liquidity provision through the standing U.S. dollar liquidity swap line arrangements. This initiative also aims to ensure the smooth functioning of financial markets, facilitate cross-border credit flows, and ease the strain on the global financial system caused by the ongoing economic crisis.
Concretely, the frequency of operations with a 7-day maturity will allegedly rise from once weekly to once daily at the central banks that now provide operations in US dollars. Beginning on March 20 and continuing at least through April, there will be a change in procedure, according to Nick Timiraos, the chief economics correspondent at the Wall Street Journal.
This is hoped to serve as a liquidity backstop that will reduce the stresses that are now present in global financial markets. Additionally, in light of these developments, cryptocurrency enthusiasts are concentrating intensely on the effects these rulings will have on the cryptocurrency market.
On the other hand, the Chief Executive Officer of Messari, Ryan Selkis, believes that the ongoing financial crisis and general economic circumstances will contribute to an increase in Bitcoin values.
As a consequence of the current macroeconomic circumstances, he forecasts that the price of Bitcoin will reach $100,000 during the next twelve months; however, he emphasizes that this is a best-case scenario projection.
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