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Fed’s Powell has no intent to ban cryptocurrencies

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The Federal Reserve System (the Fed) has no plans to ban cryptocurrencies, but some digital assets need to be included in the legal field. Chair of the agency Jerome Powell stated this during a speech to the Financial Services Committee of the House of Representatives of the US Congress.

Congressman Ted Budd asked Powell if the Fed was going to 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 head of the Federal Reserve responded negatively. However, he stressed the need to regulate stablecoins.

“Stable coins are similar to money market funds, to bank deposits. But to some extent, they are outside the regulatory perimeter. It is quite appropriate to include them in the legal field. The same activity, the same regulation,” he said.

The Fed must work to support domestic innovation

Earlier, the POBC called cryptocurrencies and stablecoins a threat to the traditional financial system and ruled that the activities of platforms that exchange digital assets among themselves or for fiat are illegal.

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

“The Fed must work to support domestic innovation,” said Congressman Tom Emmer.

Digital dollar would hit popularity of Bitcoin

Recall that in July, Powell said that the emergence of the digital dollar would hit the popularity of Bitcoin. Such comments were made during the answers to questions from members of the House of Representatives. After making a report on the state of the economy.

“You wouldn’t need stable coins and cryptocurrencies if you had a digital dollar. This is one of the strongest arguments in his favor,” Powell said.

The chair of the Fed stressed that the dollar is not in danger of losing the status of a reserve currency. Even after appearance of CBDC in other countries. “Dollar has no competitors. The USA has everything for the reserve status. The priority should be to do everything right when releasing the digital version of the currency. And not at the pace of implementation,” he explained.

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