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The US government is considering creating a central bank for cryptocurrencies.

The US government is considering the creation of a central bank for cryptocurrencies and “encourages” the Federal Reserve to continue looking into the possibility, the White House said in a statement.

The administration led by Democrat Joe Biden will also launch an interagency working group to support the Fed‘s efforts and consider the impact of creating a central bank-backed digital currency.

In March this year, the US President ordered his administration to evaluate the creation of a US digital currency backed by the Federal Reserve.

This would be a central bank digital currency, different from cryptocurrencies in that it would be backed by a country’s financial institutions.

Both the Federal Reserve and the US Treasury have consistently warned in recent years about the dangers associated with cryptocurrencies, which they consider speculative and highly volatile assets.

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