Federal Reserve Chair Jerome Powell says the central bank “doesn’t really see significant macroeconomic implications” from crypto volatility. The Fed chairman stressed the need for a better regulatory framework for cryptocurrencies.
Fed Chair Powell Says Crypto Needs Better Regulation
Federal Reserve Chair Jerome Powell testified before the Senate Committee on Banking, Housing and Urban Affairs on Wednesday about “the semi-annual report on monetary policy to Congress.”
Senator Kyrsten Sinema (D-AZ) asked him whether the Fed has been monitoring crypto activity given recent market volatility, and what implications crypto has on the broader economic outlook and monetary policy.
“We are, of course, following those events very carefully,” Powell replied, explaining:
[We are] not really see significant macroeconomic implications so far.
“The main implication is what we’ve been saying for a while, and others have been saying for a while, which is that there is a real need for a better regulatory framework in this highly innovative new space,” he emphasized.
The same activity should have the same regulation wherever it appears and it doesn’t now.
In March, the Fed Chair said, “Our existing regulatory frameworks are not built with a digital world in mind… Stablecoins, central bank digital currencies, and more broadly digital finance, will require changes to existing laws and regulations, or even entirely. require new rules and frameworks.”
Powell also told the Senate banking committee on Wednesday that the central bank is committed to cutting inflation, which he says the Fed can do. “At the Fed, we understand the difficulties caused by high inflation. We are committed to curb inflation, and we are doing everything we can to do it quickly,” he said.
Regarding the US economy potentially slipping into recession, he stressed: “It’s not at all our intended outcome, but it’s certainly a possibility, and frankly, the events of recent months around the world have made it more difficult for us. made to achieve what we want, which is 2% inflation and still a strong labor market.”
What do you think of Fed Chair Powell’s comments? Let us know in the comments below.
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