• No Crypto Ban, but Regulation Is Required, Says Fed Chairman Powell

  • US Federal Reserve Chairman Jerome Powell has stated that he has no intention of outlawing cryptocurrencies. Stablecoins, he added, should be regulated.

    Speaking before the House Committee on Financial Services, US Federal Reserve Chairman Jerome Powell stated that the authority had no objection to prohibiting the use of cryptocurrencies. Rather, he believes that the crypto market should be governed by existing laws.

    Although it was never likely that the US government would outright ban cryptocurrencies, investors will breathe a sigh of relief as a result of the remark. Powell was responding to an earlier comment in which he stated that cryptocurrencies could be replaced by a central bank digital currency (CBDC).

    Rep. Theodore Budd of North Carolina asked the Fed Chairman if he would ban or limit the use of cryptocurrencies. Powell flatly refused, stating that he had “no intention of banning them.” In terms of stablecoins, he stated,

    “They are, to some extent, outside the regulatory perimeter, and they should be regulated.” The same activity, the same regulations.”

    The meeting also includes U.S. Treasury Secretary Janet Yellen, who has previously made comments on the crypto market that were not always positive. Yellen is one of those looking into the potential effects of cryptocurrency and stablecoins.

    Powell recently made headlines when he was interviewed on 60 Minutes. His subsequent statements conveyed a mixed message. However, he appears to be interested in a CBDC, stating that the United States should get it right rather than being the first to do so. With the increasing number of developments and updates from the government on cryptocurrencies, it appears that the United States is preparing for a far more significant change in the crypto market.

    How long will it be before the United States implements crypto regulation?

    Powell’s statement comes at a time when regulatory bodies in the United States are devoting significant resources to developing a regulatory framework. The Securities and Exchange Commission (SEC), the United States Treasury, and the Office of the Comptroller of the Currency are all involved.

    These authorities have made a variety of statements, some of which are contradictory, but the general sense is that they want to enact measures that protect investors, prevent market manipulation, and ensure the sovereignty of the US dollar. According to reports, the US Treasury is working on regulations for the stablecoin niche, which has become a hot topic among regulators worldwide.

    The increased focus of regulators suggests that regulation is likely in the near future, though no specific timeline has been provided. Once in place, investors and market participants can anticipate decisions on cryptocurrency ETFs, which the SEC has delayed while it investigates regulatory issues. There has already been some progress in this regard, with SEC Chairman Gary Gensler expressing tentative support for bitcoin ETFs based on futures contracts.

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