Federal Reserve Chair Jerome Powell said that new regulations are needed as cryptography poses risks to the US financial system and can destabilize existing financial institutions.
Federal Reserve Chairman Jerome Powell recognizes the need for new cryptographic regulations
Federal Reserve Chairman Jerome Powell spoke on Wednesday about the need to establish new regulations on cryptocurrencies in a panel discussion on digital currencies hosted by the Bank for International Settlements (BIS).
Keeping in mind that new forms of digital money, including cryptocurrencies and stablecoins, will require new rules to protect consumers, the Fed chair said:
Our existing regulatory framework was not built with the digital world in mind … Stablecoin, central bank digital currencies, and more generally digital finance, existing laws and regulations, In addition, entirely new rules and frameworks need to be changed.
Powell reiterated his stance that crypto should follow the principle of “same activity, same regulation”. Last October, he proposed to regulate stablecoin issuers like banks. “Stablecoin is like a money market fund. They are like bank deposits … and it is appropriate that they are regulated, the same activity, the same regulation,” he said. ..
“It’s very likely that digital financial activities that are currently out of regulation will be regulated,” he added, “to level the competition, maintain user confidence, and protect consumers.” I need it. “
The chairman of the Federal Reserve Board acknowledged that new technologies could make electronic payments cheaper and faster. However, he noted that it could pose risks to the US financial system and destabilize existing financial institutions.
Powell further emphasized that “cryptocurrencies have been used to foster illegal activity,” such as money laundering. He states:
Innovations that prevent this, survive, and attract widespread adoption need to be value-providing over time.
The Federal Reserve also said that Americans buying cryptocurrencies and stablecoins “may not fully understand the extent of potential losses, or these investments are generally familiar to them. Warned that it lacks government protection associated with many of the traditional financial products and services it has. “
What do you think of Federal Reserve Chairman Jerome Powell’s comments? Let us know in the comments section below.
Kevin Helms
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