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Federal Reserve Chairman Jerome Powell has assured that the U.S. has no plans for a blanket ban on crypto similar to China. He did say that stablecoins need greater regulatory oversight as they are outside the regulatory perimeter.
The U.S. Federal Reserve is Not Going to Ban Crypto Like China
During a session at the U.S. House Financial Services Committee, Federal Reserve Chairman Jerome Powell responded to a question from the Republican Representative Ted Budd of North Carolina clarifying the statements he made in a July hearing.
At the time, he said, “You wouldn’t need stablecoins, you wouldn’t need cryptocurrencies if you had a digital U.S. currency.” Quoting the central bank’s regulator, Ted Budd continued "Is it your intention to ban or limit the use of cryptocurrencies, like we're seeing in China?"
"No intention to ban them," Powell responded saying he had been referring to stablecoins in his earlier testimony and not cryptocurrencies, “I immediately realized that I had misspoken. Take the word ‘cryptocurrency’ out of that sentence.”
Stablecoin Needs Regulatory Oversight
According to him, a stablecoin or a cryptocurrency performs a similar role to that of a central bank digital currency (CBDC), without the added regulatory risks but the digital tokens still need to be regulated.
“Stablecoins are like money market funds, they’re like bank deposits, but they’re, to some extent, outside the regulatory perimeter and it’s appropriate that they be regulated.”
The Federal Reserve Chairman has recently revealed that a CBDC is already on the pipeline for release, pending further assessment and analysis with the Federal Reserve Bank of Boston working with the Massachusetts Institute of Technology (MIT) on multi-year research collaboration.
“We're working proactively to evaluate whether to issue a CBDC and, if so, in what form...We think it’s really important that the central bank maintain a stable currency and payments system for the public’s benefit. That’s one of our jobs.”