Italy’s Bank of Italy issued a warning regarding the growing relationship between cryptocurrencies and traditional financial systems in its latest financial stability report. The report highlights the increasing influence of digital assets, particularly those with high volatility like Bitcoin, and how their integration with conventional financial institutions could amplify market instability risks. This concern is especially pronounced following recent policy signals from Washington that have led to the U.S.’s rapid development of a regulatory framework for cryptocurrencies, including stablecoin rules pegged to the dollar. The report emphasizes the heightened volatility in the broader crypto space stemming from this dynamic. ]