The Fed will not ban Bitcoin like China did, as Chairman Jerome Powell stated, and it makes a distinction between regulating stablecoins and banning it outright, so keep reading our latest Bitcoin news today. .
Federal Reserve Chairman Jerome Powell testified before the House of Representatives Financial Services Committee, saying he had no intention of banning cryptocurrencies. Powell stated that he has no intention of banning cryptocurrencies like China did when his response to Rep. Ted Budd’s question came during a House Committee hearing on financial services at the Treasury Department and the Federal Reserve’s response to the COVID pandemic. Budd asked:
“Do you intend to ban or restrict the use of cryptocurrencies as we see it in China?”
Budd asked the Feds, citing comments made in July, that creating a digital dollar could make stablecoins irrelevant, but Powell replied, “Are not.” He made it clear that he mentioned stablecoins in his earlier testimony, but not all cryptocurrencies. He says:
“There is no intention of banning it. But stablecoins are like money market funds, they are like bank deposits, but to some extent they are outside the scope of regulation. And it is appropriate that they should be regulated. Same operation, same regulation ”.
Stablecoins like USDC and Tether are digital assets designed to hold a 1: 1 value against fiat currencies, and Powell has raised concerns about Tether’s performance in the past, noting that USDT is not fully supported with a combination of real dollars and other assets such as debt in the form of commercial papers. Powell continued:
“Most of the time they are very relaxed, everything is fine. The market has disappeared. And then people want their money. “
Regulations will ensure consumers get their money’s worth in a crisis, and those views aren’t all that different from those of the pro-BTC senator Cynthia Lummis Who said that:
“It may be that stablecoins should only be issued by custodians or through money market funds or similar funds. Stablecoins must be 100% covered by money and cash equivalents, and this should be checked regularly. “
Powell has been working with Treasury Secretary Janet Yellen on a draft of stablecoin regulations that are expected in the next few weeks but will have no impact on other cryptocurrencies such as ETH and BTC. The People’s Bank of China didn’t have that discussion, just imposed stricter regulations to restrict the use of cryptocurrencies even as they experimented with the central bank’s digital currency – the people’s digital currencies, but the Fed won’t ban them like it is the Chinese did.
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