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- Cryptocurrencies have not become a viable payment method, Fed Chairman Jerome Powell said on Thursday.
- Powell reiterated that stable coins – and their lack of regulation – are a major concern for the Fed.
- Concerns about stablecoins abound, including the fact that they could be used to manipulate markets and have a questionable peg to the dollar.
- Sign up here for our daily newsletter, 10 things before the opening bell.
Cryptocurrencies have tried and failed to become a viable means of payment, other than their use by privacy enthusiasts, Federal Reserve Chairman Jerome Powell told the Senate Banking Committee on Thursday.
“With cryptocurrencies, it’s not that they didn’t aspire to be a payment mechanism, it’s that they completely failed to become one, except for people who want anonymity, well sure, for some reason, “he told Senator Cynthia Lummis. of Wyoming.
Elaborating on his testimony to the House financial services committee on Wednesday, Powell reiterated that stablecoins – and their lack of regulation – are a major concern for the Fed.
“The real question is stablecoins,” he said, comparing dollar-linked cryptocurrencies to money market funds or bank deposits. “They grow up incredibly fast, but without proper regulation.”
“If we’re going to have something that looks like a money market fund, or a bank deposit, or a narrow bank – and it’s growing very quickly – we really should have proper regulation. And today we don’t. don’t, ”Powell added.
Powell told the House committee on Wednesday that an official U.S. digital currency could avoid the need for cryptocurrencies or stablecoins.
Concerns about stablecoins abound, and include fears that they could be used to manipulate markets and have questionable dollar ties. Last year, several House officials proposed legislation that would place stablecoins under traditional banking regulation.
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