Federal Reserve Chairman Jerome Powell said this week that the US has no plans to ban cryptocurrencies.
On Thursday, during the Oversight of the Treasury Department’s and Federal Reserve’s Pandemic Response hearing, Powell was questioned by House Representative Ted Budd (R-N.C) about the chairman’s intention on cryptocurrencies and if he will take a similar approach as China which continues to strengthen their ban on crypto.
A long-time crypto proponent, Budd is also a member of the Congressional Blockchain Caucus.
Budd asked Powell if it was his “intention to ban or limit the use of cryptocurrencies like we’re seeing in China?” Powell had a simple “No” in response to that.
When Budd asked yet again if he had “no intention to ban them?” Powell responded with another round of,
“[I have] no intention to ban them.”
The Fed Chief further explained his previous comments on central bank digital currencies (CBDCs) and that once a digital dollar is established, “you wouldn’t need stablecoins.”
Powell said stablecoins need greater regulatory oversight and compared them to money market funds or bank deposits.
“They’re to some extent outside the regulatory perimeter, and it’s appropriate that they be regulated. Same activity, same regulation.”
During the two-hour-long hearing, Budd also asked about the state of inflation in the US, which Powell deflected, claiming that it is due to the repeated supply chain interruptions caused by the Government’s pandemic response.
Furthermore, the Fed’s hands are tied when it comes to inflation, and that inflation should go down in “the first half of next year,” Powell said.
Rep. Warren Davidson (R-Ohio), who is also a Congressional Blockchain Caucus member, commented on the lack of regulatory clarity surrounding digital assets.
Davidson asked Yellen to define digital assets for tax-accounting purposes, but Yellen deflected the question, saying the agency was in the process of issuing “detailed regulations that will answer that question.”
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