Jerome Powell: “No Intention to Ban Cryptocurrencies”

Reading Time: 2 minutes
  • Jerome Powell has said that the Federal Reserve has no plans to ban cryptocurrencies
  • Powell told the House Financial Services Committee that the U.S. would not follow China’s lead
  • This many be because trying to ban cryptocurrencies in the U.S. would be self defeating

Jerome Powell has said that the Federal Reserve has no plans to ban cryptocurrencies in the way that China has done. Such an event, while unlikely, has suddenly become a possibility of growing concern as regulatory talk has flourished this year, but Powell has put to bed any concerns of such authoritarian action but warned that regulations are coming. China has taken bigger steps in 2021 than ever before in its crackdown on cryptocurrencies, and with U.S. regulators also making strides to come after crypto this year, Powell’s statement will be received with relief by those in the crypto space.

Fed Keen to Regulate Stablecoins

Powell was talking before the House Financial Services Committee on Thursday yesterday when the subject of cryptocurrencies and in particular stablecoins came up. With the Federal Reserve known to be looking at a digital dollar, potentially with more rapidity given China’s startling progress with their digital yuan, Powell and the Fed will be keen to ensure that non-approved stablecoins don’t provide unwelcome competition to a digital dollar in the way that cryptocurrencies in general are providing an alternative to fiat currencies.

Cryptocurrencies Will Not (or Cannot?) be Banned

To this end, Powell stated that stablecoins, like all cryptocurrencies, need regulation but that there was “no intention to ban” cryptocurrencies, including stablecoins. This will naturally be taken as good news by the crypto community, but it may simply be that the Fed knows that trying to ban cryptocurrencies would be more hassle than it’s worth, given that the coins would still easily be traded in place of money and that such an event may simply lead to pushing their usage underground as opposed to on the surface where they can deal with any threats they feel they pose.