Fed Chairman Jerome Powell said that officials at the US central bank are still watching the cryptocurrency market very closely amid the financial economic turmoil.
Fed’s new move
On June 22, Federal Reserve Chairman Jerome Powell testified with a Senate committee. When asked about the recent crypto market impact on Fed policy, Mr. Powell said the Fed is still monitoring the situation “very carefully” but is not too worried, adding that the central The central government “didn’t really see any significant macroeconomic impacts so far.”
However, Mr. Powell said that it is necessary to act immediately to set operating standards for this field.
“…in this very creative and nascent space, there really is a need for a better regulatory framework. The same activity should have the same set of regulations, because many digital financial products are, in some ways, quite similar to those that already exist in the traditional banking system or capital markets. So we need to do that.”Mr. Powell said
Mr. Powell was also questioned about stablecoins – digital assets tied to fiat but less volatile than Bitcoin and considered the backbone of the cryptocurrency market. He replied that stablecoins are an emerging fork and do not currently have the “fit for purpose” regulation they need. Treasury Secretary Janet Yellen previously used the example of the collapse of the UST to call for a stablecoin regulatory framework. This is seen as an opportunity for the government and legislators to more easily “dump” into the crypto market.
Before the US inflation reached the highest level in 4 decades, the Fed once again decided to raise interest rates by 0.75% to 1.75%. Prior to this news, Bitcoin fluctuated wildly. Combined with many sell-off incidents in the past time, many big players fell into insolvency, Bitcoin price for the first time in 18 months lost the $20,000 mark, Ethereum returned to the “top 3”. Both the crypto market and the traditional stock market seem to be taking a beating and having a pretty bad year.
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