The post Italy’s Central Bank Warns of Crypto Instability as Trump Administration Embraces Digital Assets appeared on BitcoinEthereumNews.com.

Key Takeaways: The Bank of Italy warns that crypto’s integration with traditional finance may trigger systemic risks. Concerns rise as President Trump’s administration softens regulations and promotes crypto adoption. Though central bank warning, Italy’s biggest bank keeps putting money into Bitcoin. Linking market dangers to rising acceptance and political support—especially in the United States under President Donald Trump, Italy’s central bank has issued a stark warning on the potential impact of cryptocurrencies on world financial institutions. Italy’s financial industry seems split despite the warnings; big banks are pushing ahead with cryptocurrency investments. Read More: Italy Tightens Oversight of Cryptocurrencies: Protecting Markets or Limiting Innovation? The Growing Relationship Between Crypto and Conventional Finance The April 2025 Financial Stability Report of the Bank of Italy underlined how increasing interconnectedness between digital assets and traditional financial institutions could cause market volatility. Though recent political events—especially in the United States—have heightened attention, this worry is not novel. The central bank underlined in its report that crypto values climbed after Donald Trump’s re-election, pointing out the administration’s positive attitude toward the digital asset sector. The study implies that such policy alignment can promote too high risk-taking among financial intermediaries and raise general market exposure to very volatile assets. “If these instruments were to become more closely entwined with the traditional financial system, there could be greater vulnerabilities for markets and intermediaries,” the Bank noted. The report further warned that the $2.75 trillion global crypto market, with Bitcoin accounting for over 60% and stablecoins just 9%, has reached a level of maturity that poses macroeconomic threats when paired with lax oversight. Read More: Italy’s Largest Bank Makes Its 1st Big Move into Bitcoin with a $1M Purchase Political Shifts in the U.S. Raise Red Flags The Trump administration’s pro-crypto approach is causing unease among European financial…

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Filed under: News - @ April 30, 2025 2:21 pm