Federal Reserve Chairman Jerome Powell believes the federal government needs to regulate the cryptocurrency market, but the mass ban on Bitcoin (BTC) and other digital assets is not in sight.
In response to a question from North Carolina’s Republican agent Ted Budd, Powell clarified that a Chinese-style ban on digital assets was not being considered. The question from MP Budd came in response to Powell and raised doubts about the regulatory status of stablecoins and the central bank’s ongoing discussions about the so-called “digital dollar”. (In Powell’s view, a central bank digital currency, or CBDC, can perform many of the functions of stablecoins and cryptocurrencies, but without the regulatory risk.)
“Stablecoins are like money market funds [and] like bank deposits, but they are to some extent out of scope and regulated accordingly, ”said Mr. speak. “Same operation, same regulation.”
– LilMoonLambo (@LilMoonLambo) September 30, 2021
Related: Countries that account for more than 90% of global GDP are researching CBDCs (The Fed’s Powell)
Central bank digital currency has been on the Fed’s radar for a while, but policy makers have yet to decide whether to move forward with the project. Meanwhile, the central bank has published several research reports on the potential benefits and obstacles of CBDC issuance.
Powell oversees the central bank’s Federal Open Market Committee, which is responsible for setting US monetary policy. Earlier this month, the commission decided to stick with the current stimulus programs, but said the bond-buying program caused by the pandemic is likely to end soon. The warning appears to have put some downside pressure on risk assets, including stocks and cryptocurrencies.