When members of the Senate Banking Committee faced concerns about the “cutting” trend that is plaguing the crypto industry, Federal Reserve Chairman Jerome Powell said he was worried about it too, and already internal oversight at the Fed. He said he is tweaking the policy.
“I’m also troubled by the amount of these reports,” Powell said in regular testimony before the Senate Banking Committee on Tuesday. “One theory is that banks are very risky,” and about aggressive oversight that doesn’t want to welcome customers who may stretch their compliance demands, he said, “Banks are very risky.” That’s what it means.”
“We’re determined to take a new look at it,” Powell said.
The new financial watchdog, appointed by Republican lawmakers and President Donald Trump, is special scrutiny on the so-called b-fire that it was encouraged by the Fed, federal deposit insurance companies and banking institutions in the previous administration, including the federal government secretary. I gave it to you. currency.
Powell also had a recent obstruction hearing that Sen. Crypto-Advocate Cynthia Lummis had a policy to direct a greater supervision scrutiny for bankers engaged in controversial speeches and activities. I’m grateful for bringing it up. He said the policy has been removed from the internal manual it came from.
Crypto-surveillance was not a central topic at Powell’s hearing on Tuesday, but some of the industry’s major issues have been raised, including Stablecoins and Central Bank Digital Currencies (CBDCS).
Powell said the Fed supports new regulatory initiatives, centered around Stablecoins. This is a token designed to maintain stable value by being fixed to assets such as the US dollar.
“Stablecoins may have a big future for consumers and businesses,” Powell says. “We don’t know that right now, but it’s important to develop in a stable way in which there is a regulatory framework, in a safe, healthy way to protect consumers, savers and more.”
The US Central Bank Chairman also gave a clear answer to his intentions regarding the CBDC. This is an ambiguous threat to the digital dollar, which has long been concerned about US crypto companies, although the US proposal has never really evolved. When asked if he would agree to never launch CBDC, Powell simply replied “Yes.”
The possibility of matching the Chinese and European experiments with the CBDC has already continued to grow farther in the United States in the elections of Trump and Congressional majority, which are heavily opposed to such efforts.
Powell will speak again at a hearing in the U.S. House of Representatives on Wednesday. And Crypto was set to be a featured topic at a hearing before the House Financial Services Committee late Tuesday afternoon.
Monetary policy outlook
The Fed Chairman’s comments on the economy and interest rates were not surprising.
“We’re in a pretty good place in this economy,” Powell said in a prepared statement. And I think our policy rates are in a good place. And I can’t see any reason to hurry to reduce that even further. ”
Of course, the Fed has cut its rates three times in the last four months of 2024 with a total of 100 basis points. However, a series of strong reports on the economy and inflation led to the sudden closure of the central bank in mid-December. The idea of ease of policy in the future until the economy or inflation, or both, shows much greater weaknesses.
This has been one of the factors that have dampened crypto prices in recent weeks. Bitcoin (BTC) shows even more weakness in Tuesday afternoon trading, falling 2.35% to $95,140 over the past 24 hours.
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