Federal Reserve Chairman Jerome Powell believes the federal government needs to regulate the cryptocurrency market, but a blanket ban on Bitcoin (BTC) and other digital assets is not on the cards.
U.S. Federal Reserve Chairman Jerome Powell made it clear that there are no plans for a Chinese-style crackdown on cryptocurrencies during a hearing on Thursday held by the House Committee on Financial Services.
Asked by Conservative Rep. Ted Budd of North Carolina on whether or not the Fed is considering banning or restricting the use of digital currencies, Powell replied that there were no such intentions.
Budd asked the central bank’s top regulator:
“Is it your intention to ban or limit the use of cryptocurrencies, like we’re seeing in China?”
“No,” responded Powell, clarifying that he had been referring to stablecoins in his earlier testimony, not to all cryptocurrencies.
“No intention to ban them. But stablecoins are like money market funds, they’re like bank deposits, but they’re to some extent outside of the regulatory perimeter. And it’s appropriate that they be regulated. Same activity, same regulation.”
That said, the central banker mentioned that cryptocurrencies (especially stablecoins) need to be regulated.
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As reported by TheCryptoBasic, the People’s Bank of China banned all cryptocurrency trading and mining activities last Friday, causing the market to sell off.
With cryptocurrencies growing in importance in the United States, industry watchers are keeping a close eye on the latest regulatory developments.
Tesla CEO Elon Musk recently advised the US government to “do nothing” about the new asset class:
“I would say, don’t do anything. Just let them fly.”
As of today, the Federal Reserve is still weighing the benefits and costs of creating a central bank digital currency. A report on the “digital dollar” is expected to be released in the near future.