It looks like the Federal Reserve is stepping up its game when it comes to regulating the wild world of cryptocurrencies.
Fed Chair Jerome Powell recently urged Congress to get a move on with creating some solid regulations for crypto assets, because he believes that a stronger regulatory framework would be a real game-changer.
Changing times, changing attitude?
Powell shared at a press conference that the Fed has been working closely with Congress on this issue.
“We’ve spent a lot of time with the House Financial Services Committee, and I think it would be super constructive for Congress to take action.”
Powell’s comments came right after the Fed decided to keep interest rates steady at 4.25% to 4.5%, following some inflation data that didn’t quite meet expectations.
No more debanking for crypto users?
Now, here’s where it gets interesting, as Powell made it clear that the Fed isn’t anti-innovation when it comes to cryptocurrencies, but he addressed concerns about banks potentially cutting ties with crypto customers, cautioning against what he called excess risk aversion. In other words, banks shouldn’t ditch perfectly legal customers just because they’re feeling a little too cautious about regulations.
Powell pointed out that the bar has been set a bit higher for banks dealing with crypto because it’s still relatively new territory.
“Banks can totally serve crypto customers as long as they understand the risks involved and operate safely.”
Powell emphasized that individual investors need better protection since the risks associated with crypto might not be fully understood by them.
He even drew comparisons between crypto and traditional investments like stocks and mutual funds, insisting that similar consumer protections should apply.
The halls of power
As for politics, Powell is keeping things neutral, so he’s not biting on recent comments from Donald Trump and mentioned that there’s been no contact with the new president.
He believes that any disagreements could hurt the credibility of the Fed.
And in case one is wondering how crypto markets are faring, they’ve seen a slight uptick during Thursday morning trading in Asia, with Bitcoin leading the charge and making a comeback at around $105,000.
