ECONOMICS & FINANCE

Financial Woes Worsen for Trans-Atlantic Financial System

Jan. 2, 2026 (EIRNS)—News during the turn to the New Year has underscored the reality that the trans-Atlantic financial system may be facing dark days ahead, and the U.S. Federal Reserve may need to step in to plug the holes. First, it was reported that cryptocurrency investors lost over $1 trillion in market value in 2025, according to the Wall Street Journal. Rats are now leaving the ship, and 2026 looks to be even worse. Some of the massive data centers for Bitcoin mining have already been converted to AI data centers, in a desperate hope to “cash in” on the next big speculative bubble. Even “crypto treasury companies,” which were established to buy up crypto, have essentially stopped their buying spree. Santiago Roel Santos, CEO of Inversion crypto-investment firm, said, “The sentiment is pretty dire…. I think the most uncomfortable phase of crypto has begun.”

Just months before the “crypto winter,” digital assets were soaring (on paper). Washington appointed crypto-friendly regulators, U.S. President Donald Trump and his family launched their own crypto ventures, and Wall Street was determined to make crypto a part of everyday investment portfolios with ever-new crypto-based products. Congress passed the GENIUS Act to pave the way for “stablecoins” in 2025, and will soon begin to debate the CLARITY Act in order to more fully integrate digital assets into mainstream financial institutions, services, and products.

To make matters even worse, on Dec. 31, 2025, banks borrowed an unprecedented $74.6 billion from the Federal Reserve’s repo facility—the largest amount since 2020 during the Covid pandemic. Year-end is usually critical for banks, which tend to hold liquidity and restrain loaning. Despite this, there was no repo liquidity last year. On Dec. 31, 2024, the repo operations were kept at zero, as the Fed records show.