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U.S. Federal Reserve Chairman Jerome Powell said he has no intention to ban cryptocurrencies. He also stated that stablecoins should be regulated.
United States Federal Reserve Chairman Jerome Powell, speaking before the House Committee on Financial Services, said that the authority had no issue to ban cryptocurrencies. Rather, he believes that the crypto market should be regulated in accordance with existing laws.
Although it was never likely that the U.S. government would completely ban cryptocurrencies, the remark will nevertheless bring a sigh of relief from investors. Powell was responding to a comment that he made earlier when he said that cryptocurrencies could be replaced by a central bank digital currency (CBDC).
The Fed Chairman was asked by Rep. Theodore Budd of North Carolina whether he would ban cryptocurrencies or at least limit their use. Powell firmly said no and that he had “no intention to ban them.” Speaking of stablecoins, he said,
“They’re to some extent outside the regulatory perimeter, and it’s appropriate that they be regulated. Same activity, same regulation.”
The meeting also features U.S. Treasury Secretary Janet Yellen, who has made her own comments — not always supportive — on the crypto market in the past. Yellen is among those investigating the potential effects of crypto and stablecoins.
Powell also made headlines recently when he was interviewed on 60 Minutes. His statements then offered a mixed message. But he does seem keen on a CBDC, having said that the U.S. should get it right as opposed to being the first one to do it. With the rising number of developments and updates coming out of the government on cryptocurrencies, it appears that the U.S. is gearing up for a far more substantial change concerning the crypto market.
How long before the US implements crypto regulation?
The statement from Powell comes at a time when U.S. regulatory bodies are putting plenty of resources into developing a framework for regulation. Those involved include the Securities and Exchange Commission (SEC), the U.S. Treasury, and the Office of the Comptroller of the Currency.
These authorities have offered various statements, sometimes conflicting, but the general sense is that they wish to introduce measures that guarantee investor protection, prevent market manipulation and ensure the sovereignty of the U.S. dollar. The U.S. Treasury is reportedly working on regulation of the stablecoin niche, which has become a hot topic among regulators worldwide.
The increased attention from regulators suggests that regulation is likely in the near future, though a definitive timeline has not been offered. Once in place, investors and market enthusiasts can look forward to decisions on cryptocurrency ETFs, which the SEC has delayed as it investigates regulation. There has already been some progress in this regard, with SEC Chairman Gary Gensler showing tentative support for futures-based bitcoin ETFs.