Federal Reserve Chairman Jerome Powell believes that the federal government needs to regulate the cryptocurrency market, but shouldn’t ban Bitcoin and other digital assets en masse.
In a speech to Republican representative Ted Budd in North Carolina, Powell made it clear that a Chinese-style ban on digital assets is not being considered. MP Budd’s question related to the regulatory status of stablecoins and the central bank’s ongoing discussions about “digital dollars”. (In Powell’s view, a central bank digital currency (CBDC) that 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 to some extent they are outside the scope of regulation and it is appropriate to be regulated. Same operation, same regulation. “
– LilMoonLambo (@LilMoonLambo) September 30, 2021
The Fed has been considering a central bank digital currency for some time, but policymakers have yet to decide whether to move ahead with the project.
In the meantime, the central bank has released a number of 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 keep existing 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.
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According to Cointelegraph