Tuesday, August 16, 2022

U.S. Federal Reserve Chair Jerome Powell says cryptocurrencies are unlikely to disrupt financial markets.

The Takeaway:

The U.S. Federal Reserve Chair Jerome Powell has shared a fresh perspective on how the cryptocurrency industry should be monitored and controlled.

The United States Federal Reserve Chair Jerome Powell has shared a fresh perspective on how the cryptocurrency industry should be monitored and controlled. Speaking at a press conference to address the recent interest rate decision, Powell opined that cryptocurrencies don’t pose a danger to the country’s financial stability as of now. However, he also added that the agency’s focus should definitely be on monitoring cryptocurrencies.

 

Powell supports the report by President’s Working Group on Financial Markets.

In response to a question by Wall Street Journal’s Michael Derby, Powell expressed support for the conclusions of a report from the President’s Working Group on Financial Markets, which was released last month. Notably, the report stressed the urgent need for stablecoin regulation through appropriate federal oversight reminiscent of banks. Treading along the same lines, the Federal Reserve Chair said, “Stablecoins can certainly be a useful, efficient consumer-serving part of the financial system if they’re properly regulated. Right now, they aren’t. They have the potential to scale, particularly if they were to be associated with one of the very large tech networks that exist.”

 

Federal Reserve Chair expressed inhibitions about the crypto industry.

Jerome Powell, who has served as the Fed’s Chair since 2018, is all set for his second term in the position after receiving positive backing from President Joe Biden. He and his Vice-Chair Lael Brainard are seen as Fed institutionalists interested in ensuring cryptocurrencies don’t cause financial-stability risks.

While Powell did say that crypto was unlikely to be a financial stability concern for the U.S. at present, he did express his inhibitions about the industry. Thus, claiming that they are speculative assets, “risky,” and “not backed by anything.”

Disclaimer: The article reflects the opinions of the author and is not representative of Chaintimes’ views.
The article does not offer any investment advice. User discretion is advised when investing in or trading with cryptocurrency. Extensive and diligent research should be carried out by the reader before making a decision.

Jai Pratap
Jai Pratap
A Mass Media Graduate who loves to write. Jai is also a sports enthusiast and a big movie buff. He loves to learn new things.

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