While speaking at a press conference after the recent Fed interest rate decision, the Fed Chair Jerome Powell said that cryptocurrencies are currently not a danger to the country’s financial stability. He however noted that there should focus should shift to monitoring and controlling cryptocurrencies.
Jerome Powell has served as the Federal Reserve Chair since 2018 and is likely to serve for a second term following a positive backing by President Joe Biden.
Powell and his vice chair Lael Brainard have shown enthusiasm on ensuring that cryptocurrencies do not cause financial instability. Powell actually did express his reservations about cryptocurrency industry despite saying that it does not pose any risk at the moment. He stated that cryptocurrencies are speculative assets “risky,” and “not backed by anything.”
Jerome agrees with President’s Working Group on Financial Markets report
While asked by Wall Street Journal’s Michael Derby about the conclusions of the report by the President’s Working Group on Financial Markets, Powell expressed support for the conclusions.
The working group finalized and released its report last month. The report emphasized the urgency of having stablecoin regulation through proper federal oversight of banks.
Powel went ahead to note:
“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.”