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U.S. Fed chairman Jerome Powell said he has no intention of banning cryptocurrencies but said stablecoins need greater regulatory oversight. Powell made the comments in a two-hour-long House Financial Services Committee meeting this week. The meeting, meant to serve as a forum for representatives to ask Treasury Secretary Janet Yellen and Powell about the Treasury Department’s and Federal Reserve’s pandemic response, featured several questions about cryptocurrencies.
Jerome Powell asked to clarify his statements on the development of CBDC.
Republican Senator Ted Budd, a longtime proponent of crypto and a member of the Congressional Blockchain Caucus, asked Powell to clarify statements he had made during a July hearing that the development of a U.S. central bank digital currency (CBDC) could undercut the need for private crypto and stablecoins. When asked by Budd directly whether or not he intended to “ban or limit the use of cryptocurrencies,” Powell’s response was a resounding “No.” “[I have] no intention to ban them,” Fed chairman said.
Powell asked Congress for consultation and legislative support to develop the digital dollar.
Powell’s remarks come just two days after he asked Congress for consultation and legislative support to develop the digital dollar. Some in the crypto community have speculated that the launch of a U.S. CBDC would lead to bans on private crypto, as was recently seen in China, but Powell’s remarks suggest otherwise. When asked about stablecoins, Powell compared them to money market funds or bank deposits. “They’re to some extent outside the regulatory perimeter, and it’s appropriate that they be regulated. Same activity, same regulation,” Powell said. Rep. Warren Davidson (R-Ohio), also a member of the Congressional Blockchain Caucus, remarked on the lack of regulatory clarity surrounding cryptocurrencies and asked Yellen to define digital assets for tax-accounting purposes.