The post Federal Reserve Warns of Leverage Risks in Asset Tokenization and RWA! appeared first on Coinpedia Fintech News
The Federal Reserve has released a working paper that highlights the advantages of asset tokenization and risk-weighted assets (RWA) in the financial industry. The report states that tokenization can lower investment thresholds, promote standardization, improve liquidity, add new functions, and promote lending. However, it also warns that the redemption mechanism and liquidity of these assets may bring higher leverage risks and affect financial stability. The report highlights the need for adequate regulation and oversight of the tokenized asset market to safeguard against potential risks.
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