Federal Reserve Chairman Jerome Powell says the central bank “doesn’t really see a significant macroeconomic impact” of cryptocurrency volatility. The Fed chairman emphasized that there is a need to improve the regulatory system for cryptocurrencies.
Fed Chairman Powell Says Cryptocurrency Needs Better Regulation
Federal Reserve Chairman Jerome Powell testified before the Senate Banking, Housing, and Urban Affairs Committee on the “Semi-Annual Monetary Policy Report to Congress” on Wednesday.
Senator Kirsten Cinema (D-AZ) asked him if the Fed is monitoring crypto activity given the recent market volatility and what impact crypto has on the broader economic outlook and monetary policy.
“Of course, we are monitoring these developments very closely,” Powell replied, elaborating:
[We are] I do not yet see significant macroeconomic consequences.
“The main takeaway is what we have been saying, and others have been saying for some time, which is that there is indeed a need for a better regulatory framework in this very innovative new space,” he stressed.
The same activity should have the same regulation wherever it appears, and this is not the case now.
In March, the Fed chairman said, “Our existing regulatory framework was not designed with the digital world in mind… Stablecoins, central bank digital currencies, and digital finance in general will require changes to existing laws and regulations, or even entirely new rules and frameworks.”
Powell also told the Senate Banking Committee on Wednesday that the central bank is determined to bring down inflation, which he believes the Fed can do. “At the Fed, we understand the difficulty of high inflation. We are committed to bringing inflation down and we are moving fast towards that,” he said.
Regarding the US economy, which may be sliding into recession, he stressed: “This is not at all our intended outcome, but it is certainly an opportunity, and, frankly, the events of the past few months around the world have made it difficult for us to achieve what we We want that to be 2% inflation and still have a strong job market.”
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