Jerome Powell: The Fed has no plan to ban cryptocurrencies

The Federal Reserve System (Fed) does not plan to ban cryptocurrencies, but some digital assets must be brought under regulatory oversight. This was stated by Fed Chair Jerome Powell during testimony before the House Financial Services Committee of the U.S. Congress.

Powell: No plan to ban crypto pic.twitter.com/HEPEFLAoSh

— Blockworks (@Blockworks_) September 30, 2021

Representative Ted Budd asked Powell whether the Fed would follow the example of the People's Bank of China (PBoC) and impose a “ban or restriction” on the use of cryptocurrencies in the United States. The Fed chair answered in the negative, but stressed the need to regulate stablecoins.

“Stablecoins are similar to money-market funds, to bank deposits, but to some extent lie outside the regulatory perimeter. It is quite appropriate to bring them within the regulatory field. The same activity, the same regulation,” — he said.

Earlier the PBoC named cryptocurrencies and stablecoins a threat to the traditional financial system and ruled that the activity of platforms that enable the exchange of digital assets among themselves or for fiat is illegal.

On September 28, seven members of Congress sent Powell a letter, which includes four questions regarding the Fed’s stance on custody of cryptocurrencies in federal banks, as well as the agency’s role in shaping international standards for CBDC.

Back in July, Powell said that the introduction of the digital dollar would hurt Bitcoin's popularity.

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