The Chairman of the Federal Reserve, Jerome Powell, has confirmed this week during a hearing with the House Financial Services Committee that he did not have any intention to block or restrict the use of cryptos. He also spoke about the regulation of stablecoins.
Powell Says He Has Not Plans To Block Crypto
The chairman of the Board of Governors of the Fed System, Jerome Powell, spoke about cryptos, stablecoins, and central bank digital currencies (also called CBDCs) during a hearing under the House Financial Services Committee this week. The central focus for the meeting, however, was the Fed’s and the Treasury’s responses to the coronavirus pandemic. Treasury Sec. Janet Yellen talked for the Treasury Dept..
U.S. Congress-member Ted Budd from North Carolina stated: “In a July hearing among this committee, you were asked about CBDCs and their impact on stablecoins and other cryptos, and you said, ‘You would not need stablecoins, you would not need cryptocurrencies if you had a digital United States currency.’”
Congressman Budd continued:
“So Chairman, in terms policy, is it your plan to ban or limit cryptocurrencies as we are witnessing in China.”
Powell promptly responded with: “No.”
The Fed chairman then followed his answer up with an admission that he “misspoke” before when he said, “you would not need cryptos.” Powell said, “Take the word crypto out of the sentence.”
Congressman Budd felt that his answer about the banning of cryptocurrencies was not completely clear so he asked again. “But, there is no intention to ban?” Powell then confirmed there was no intention to ban cryptocurrency.
The Fed chair proceeded to discuss about stablecoins, saying that:
“Stablecoins are akin to money market funds. They are like bank deposits but they are also to some extent outside regulation and it is appropriate that they get regulated, with the same activity and the same regulation.”
On Friday, the Wall Street Journal said that the Biden White House is trying to regulate stablecoin issuers like banks.
This comes at a time when Americans are more and more using cryptocurrencies as a way to escape inflation.
Author: Blake Ambrose