The US Has No Intentions To Ban Bitcoin Or Cryptocurrency
Powell testified before the House Financial Services Committee on Thursday on issues related to the economy and the Covid-19 pandemic
Federal Reserve Chairman Jerome Powell believes that the federal government needs to regulate the cryptocurrency market, but a mass ban on Bitcoin (BTC) and other digital assets is unlikely.
Speaking to a question from Republican Representative Ted Budd in North Carolina, Powell clarified that a China-style ban on digital assets is not something he is considering. Representative Budd’s question comes amid doubts about the regulatory status of stablecoins and ongoing central bank discussions 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 but without the regulatory risk.)
“Stablecoins are like money market funds and like bank deposits but they are, to some extent, outside the regulatory perimeter and it is appropriate to be regulated,” he said. “Same operation, same regulation”.
A central bank digital currency has been on the Fed’s radar for some time, but policymakers have yet to decide whether to pursue the project. In the meantime, the central bank has released a number of research reports on the potential advantages and barriers of CBDC issuance.
Powell oversees the central bank’s Federal Open Market Committee, the body responsible for setting U.S. monetary policy. Earlier this month, the Commission decided to leave existing stimulus programs in place but said that the bond buying program caused by the pandemic is likely to end soon. The warning appears to have put some downward pressure on risk assets, including stocks and cryptocurrencies.