Fed Chair Powell Says Crypto Needs New Regulation Citing Risks to US Financial System
The chairman of the Federal Reserve, Jerome Powell, says crypto requires new regulation, citing that it presents risks to the U.S. financial system and could destabilize existing financial institutions. Fed Chair Powell Sees the Need for New Crypto Regulation
Federal Reserve Chairman Jerome Powell talked about the need to establish new regulation for cryptocurrency Wednesday during a panel discussion on digital currencies organized by the Bank for International Settlements (BIS).
Noting that new forms of digital money, including cryptocurrencies and stablecoins, will require new rules to protect consumers, the Fed chairman said: Our existing regulatory frameworks were not built with a digital world in mind … Stablecoins, central bank digital currencies, and digital finance more generally, will require changes to existing laws and regulation or even entirely new rules and frameworks.
Powell reiterated his stance that crypto ought to follow the “same activity, same regulation” principle. In October last year, he suggested regulating stablecoin issuers like banks. “Stablecoins are like money market funds. They’re like bank deposits … and it’s appropriate that they be regulated, same activity, same regulation,” he opined.
He added that “It’s highly likely that digital financial activities that are currently outside the regulatory perimeter” will be regulated, “which is necessary to level the playing field, keep the trust of users, protect consumers and all that.”
The Federal Reserve chairman acknowledged that new technologies will likely make electronic payments cheaper and faster. However, he pointed out that they present risks to the U.S. financial system and could destabilize existing financial institutions.
Powell further stressed that crypto assets “have been used to facilitate illicit activity,” such as money laundering. He noted: We need to prevent this so that the innovations that do survive and do attract broad adoption are those that provide value over time.
The Fed chair also warned that Americans who buy cryptocurrencies and stablecoins “may not fully understand the extent of their potential losses, or that these investments generally lack the government protections that accompany many of the traditional financial instruments and services that they’re used to.” Tags in this story crypto regualtion, Crypto regulation, Fed Chair, Federal Reserve Chairman, financial system, jerome powell, jerome powell crypto, jerome powell crypto regulation, risks financial systems
What do you think about Fed Chair Powell’s comments? Let us know in the comments section below. Kevin Helms
A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography. Thailand Adopts Rules Restricting Cryptocurrency Payments From April REGULATION | 4 hours ago DBS CEO Sees Crypto as an Alternative to Gold — Says Central Banks Globally Should Regulate Cryptocurrencies REGULATION | 20 hours ago
Image Credits: Shutterstock, Pixabay, Wiki Commons Previous articleGamestop Beta NFT Marketplace Launches, Platform Leverages Loopring’s ZK-Rollup Tech Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItIndia Targets 700 Crypto Investors for Non-Payment of Taxes: Report
India"s income tax department has reportedly identified about 700 cryptocurrency investors who have failed to pay taxes on high-value crypto transactions. "We have a long list of people who were transacting in crypto assets but were not paying tax," said ... read more.Chinese Authorities Arrest Alleged Masterminds Behind an Online Virtual Currency Pyramid Scheme BNDES Director Offers New Insights on Development of Brazilian Blockchain Network RBI Crypto: Indian Government Says Central Bank Has No Plan to Issue Cryptocurrency President Zelenskyy Signs Ukraine’s Law ‘On Virtual Assets’