The Federal Reserve has proposed classifying cryptocurrencies as an independent asset class in the derivatives market.

The US Federal Reserve has proposed classifying cryptocurrencies as a separate asset class in the uncleared derivatives market, Cointelegraph reported. Uncleared transactions refer to transactions without an intermediary, typically an exchange, to handle the transaction. The Fed stated in a working paper that "cryptocurrencies are significantly more volatile than traditional asset classes and do not fit the risk criteria of the current asset class classification model (SIMM)." The Fed also suggested that traders post more margin to prevent liquidations. The Fed went on to say, "Separate risk weightings should be applied to volatile cryptocurrencies like BTC and ETH and pegged cryptocurrencies like stablecoins. Creating a benchmark index that mixes 50% of volatile cryptocurrencies with 50% of stablecoins would allow for more accurate calculations of market volatility and the risk weighting of cryptocurrencies."