Fed’s Powell has no plans to ban Bitcoin or crypto

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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 in the cards.

Speaking in response to a question from Republican Representative Ted Budd of North Carolina, Powell clarified that a Chinese-style ban on digital assets was not something he was considering. Representative Budd’s question came in response to Powell raising doubts about the regulatory status of stablecoins and the central bank’s ongoing deliberations around a so-called “digital dollar”. (In Powell’s opinion, a central bank digital currency, or CBDC, could 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 scope and it is appropriate that they are regulated ”, he said. noted. “Same activity, same regulations.

Related: Countries representing over 90% of global GDP explore CBDCs

A central bank digital currency has been on the Fed’s radar for some time, but policymakers remain undecided as to whether the project will continue. In the meantime, the central bank has commissioned several research reports on the benefits and potential barriers to issuing a CBDC.

Powell oversees the central bank’s Federal Open Market Committee, which is responsible for setting U.S. monetary policy. Earlier this month, the committee decided to leave its existing stimulus packages untouched, but said the pandemic-induced bond buying program could end soon. The warning appears to have put downward pressure on risky assets, which include stocks and cryptocurrencies.