Federal Reserve Chair Jerome Powell has no intention to ban cryptocurrency
Jerome Powell believes the federal government needs to regulate the cryptocurrency market, but a blanket ban on Bitcoin and other digital assets is not in the cards.
While responding to a question from Republican Representative Ted Budd of North Carolina, Federal Chair clarified that a ban on digital assets as China is not something he’s considering.
Republican Budd’s question came in response to Powell raising doubts about the regulatory status of stablecoins and the central bank’s ongoing deliberations around a so-called “digital dollar.”
A central bank digital currency (CBDC) could perform many of the functions of stablecoins and cryptocurrencies but without the regulatory risk, according to Powell.
“Stablecoins are like money market funds, like bank deposits but they’re, to some extent, outside the regulatory perimeter and it’s appropriate they be regulated,” he said. “Same activity, same regulation.”
A CBDC has been on the Fed’s radar for some time, but policymakers remain undecided on whether to pursue the project. In the meantime, the central bank has commissioned several research reports on the advantages and potential roadblocks of issuing a CBDC.
Powell oversees the central bank’s Federal Open Market Committee, which is responsible for setting United States monetary policy.
Earlier this month, the Committee decided to leave its existing stimulus programs intact but said that the pandemic-induced bond purchase program could be winding down soon. The warning appears to have put some downward pressure on risk assets, which includes stocks and cryptocurrencies.