Fed Chairman Jerome Powell believes the federal government should regulate the cryptocurrency market, but says a complete ban on Bitcoin (BTC) and other digital assets is not being considered.
Responding to a question from North Carolina Republican Rep. Ted Budd, Powell explained that he is not considering a Chinese-style ban on digital assets. Representative Budd’s question came in response to Powell’s doubts about the regulatory status of stablecoins and the central bank’s ongoing negotiations around the so-called “digital dollar.” (In Powell’s view, a central bank digital currency [CBDC]can perform many of the functions of stablecoins and cryptocurrencies without regulatory risk).
Powell, “Stablecoins, Money Market Funds [ve] they are like bank deposits, but to some extent they are outside the regulatory framework and appropriate for regulation. said. “Same activity, same arrangement …”
– LilMoonLambo (@LilMoonLambo) September 30, 2021
Related: 81 Countries Begin Investigating Central Bank Digital Currencies
The central bank’s digital currency has been on the Fed’s radar for a while, but policy makers were undecided on whether to proceed with the project. In the meantime, the central bank has produced several research articles on the benefits and potential pitfalls of issuing CBDCs.
Powell oversees the central bank’s Federal Open Market Committee, which is responsible for setting US monetary policy. Earlier this month, the Committee decided to leave existing stimulus programs as is, but said the pandemic-fueled bond purchase program could end soon. The warning appears to have put some downward pressure on risky assets, including stocks and cryptocurrencies.