Federal Reserve Chairman Jerome Powell said the central bank “doesn’t really see a major macroeconomic impact of cryptocurrency volatility.” The chairman of the Federal Reserve stressed the need for a better regulatory framework for crypto.
Fed Chair Powell Says Crypto Needs Better Regulation
Federal Reserve Chairman Jerome Powell testified on Wednesday before the Senate Banking, Housing and Urban Affairs Committee on “Semi-Annual Monetary Policy Report to Congress.”
Sen. Kyrsten Sinema (D-AZ) asked him if the Federal Reserve has been tracking crypto activity given recent market volatility, and what impact crypto has on the broader economic outlook and monetary policy.
“Certainly, we’re tracking these events very carefully,” Powell replied, elaborating:
[We are] So far, no major macroeconomic impact has really been seen.
“The main implication is really what we’ve been saying, and others have been saying for a while, that there really needs to be a better regulatory framework in this very innovative new field,” he stressed.
The same activity should have the same rules wherever it appears, and that’s not the case now.
In March, the chairman of the Federal Reserve Say: “Our existing regulatory framework does not take into account the digital world…Stablecoins, central bank digital currencies and digital finance more generally, will require changes to existing laws and regulations, or even entirely new rules and frameworks .”
Powell also told the Senate Banking Committee on Wednesday that the central bank is determined to reduce inflation, something he thinks the Fed can do. “At the Fed, we understand the difficulties caused by high inflation. We are firmly committed to bringing inflation back down, and we are moving quickly,” he said.
Regarding the possibility of a recession in the U.S. economy, he emphasized: “It’s not at all what we expected, but it’s certainly possible that, frankly, events around the world over the past few months have made it harder for us to achieve our goals. What we want is 2 % inflation while the labor market remains strong.”
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