Federal Reserve Chairman Jerome Powell says that crypto needs regulation due to the financial risks involved. He believes that it could risk the existing financial system of the country and destabilize the economy. Powell talks as if the US economy is doing great, and people are really satisfied with inflation and growth. Let’s see what kind of regulations the feds implement for this.
Jerome Powell on new regulation
In a recent panel discussion, he talked about establishing new regulations that can reduce the risk of cryptocurrencies. The panel was there to discuss digital currencies and was organized by Bank for international settlements (BIS). The goal here is to protect consumers from cryptocurrencies. Jerome added that the regulations that have been designed previously were not by keeping digital assets like crypto and stablecoins in mind. This is why a new framework is required.
Even in the past, Jerome has talked about regulating cryptocurrencies such as stablecoins as they are like money market funds. He compared them to bank deposits and said it’s appropriate that like banks they are also regulated. At present, whatever activities fall out of the regulatory network will soon be managed. Powell thinks this is important to protect the users and keep their trust.
Powell also talked about the problematic sides of crypto. He added that it has the risk of destabilizing the financial institutions and presents risks to the US economy. Crypto also plays a role in money laundering and other illegal activities. So, unless they make sure the negative sides of cryptocurrencies are managed, it will hinder innovation and adoption.
The hypocrisy
While I agree with many points that Jerome Powell said, it is funny to see him talking about investors’ trust. The feds couldn’t fulfill their duty of keeping inflation below 2%, so now they want to earn the trust by regulating crypto. Additionally, he also said that many Americans who buy crypto don’t fully understand the potential losses involved. Doesn’t the same go for fiat currencies with such high inflation? The feds should also create awareness around that subject and educate people how they are losing their money without doing anything.
What are your thoughts as Jerome Powell says crypto needs regulation? And do you find the hypocrisy in many of his statements? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.
Also Read: Crypto.com sponsors the 2022 FIFA World Cup in Qatar.
