The leader of the US Federal Reserve System Jerome Powell believes that the federal government should regulate the cryptocurrency market, but a complete ban on bitcoins (BTC) and other digital assets has not been resolved.
In response to a question from spokesman Ted Budd, Powell made it clear that China’s ban on digital assets is not what he had in mind. Budd’s questions responded to Powell’s growing doubts about the regulatory status of stack coins and the central bank’s ongoing debate over the so-called “digital dollar.” (According to Powell, a central bank digital currency, or CBDC, can serve many of the functions of stack coins and cryptocurrencies, but without regulatory risk.)
“Stable currencies are similar to money market funds [and] like bank deposits, but they are somewhat outside the regulated area and should be regulated,” he said. “Same activity, same organization.”
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The central bank’s digital currency has been on the Fed’s radar for some time now, but decision-makers are still hesitant to continue the project or not. In the meantime, the central bank has ordered several research reports on the potential benefits and barriers to issuing the central bank’s digital currency.
Powell oversees the Federal Open Market Committee of the Federal Reserve, which is responsible for determining the monetary policy of the United States. Earlier this month, the committee decided to leave the current stimulus programs unchanged, but said the pandemic-fueled bond buying program could end soon. The warning appears to have put some pressure on risky assets, including stocks and cryptocurrencies.