Fed Chair Says Congress Must Act on Crypto Regulation Throughout Senate Testimony

Fed Chair Says Congress Must Act on Crypto Regulation Throughout Senate Testimony

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On Wednesday afternoon, Federal Reserve Chairman Jerome Powell testified earlier than the Senate Banking Committee on his company’s financial insurance policies. He’ll present extra testimony to a Home Monetary Companies Committee on Thursday. Throughout his remarks at this time, Powell touched on a number of subjects, together with rising housing, gasoline and meals prices in 2022, in addition to skyrocketing inflation, which just lately hit a 40-year excessive of 8.6% in comparison with with the identical interval final yr. The Fed chairman additionally had a number of issues to say about cryptocurrencies and stablecoins.

What Powell Stated At the moment About Stablecoins and Cryptocurrencies

Throughout his testimony, Powell in contrast a stablecoin, which by definition has its worth backed by a reserve asset just like the US greenback or gold, to a cash market fund as a method of explaining it to lawmakers.

“The way in which cash market funds work is that there’s a lot of transparency about what’s within the reserve and their necessities about what’s required to be within the reserve to protect that worth of a greenback. The world of currencies stablecoins is new and rising, and it does not have the right-for-purpose regulatory framework it wants…many members of Congress have now proposed new frameworks to control stablecoins and digital property usually, and that looks as if a clever factor to do,” Powell stated.

He additionally famous that regulatory ambiguity is among the largest challenges dealing with the cryptocurrency sector proper now. “Who actually has authority over this? That is one thing Congress ought to make clear. We [the Federal Reserve] they’ve authority over what some banks can and can’t do. The SEC has jurisdiction over the securities and the CFTC [Commodity Futures Trading Commission] has related jurisdiction [over commodities.] A part of this can be determining what these items are and the way they need to be regulated,” he stated.

Congress strikes on

Nevertheless, he famous that Congress is making progress. “Congress is investing bandwidth and taking a look at proposals, that is a wholesome course of that ought to ultimately result in one thing that has bipartisan help and places in place the suitable regulation for all the [crypto] space. It’s like every other space of ​​nice innovation. In the end, Congress will come collectively to create a regulatory framework that’s more healthy for objective. [crypto] because it has performed in so many different circumstances,” he added.

On the time of writing, the most important cryptocurrency by market cap, Bitcoin, is down 5% for each coin traded to $19,928, in response to CoinMarketCap. Whereas cryptocurrency exchanges and the broader crypto market fell 3.83% the day after Powell’s feedback.

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