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US Federal Reserve Chairman Jerome Powell: Crypto poses no threat to US financial stability



 "Stablecoins can certainly be a useful, efficient, and consumer-friendly part of the financial system when properly regulated," said Jerome Powell.


Federal Reserve Chairman Jerome Powell said that while the government agency should monitor developments in the crypto space, he does not see cryptocurrencies as a problem for the financial stability of US markets.


When asked about crypto by Michael Derby of the Wall Street Journal on Tuesday , Powell reiterated the findings of a report by the President's Working Group on Financial Markets, released Nov. 1. The report said stablecoin issuers should be adequately supervised by the state, as should banks. Legislation is urgently needed to combat risks.


"Stablecoins can certainly be a useful, efficient, and consumer-friendly part of the financial system when properly regulated," said Powell. "At the moment they are not. They certainly have growth potential, especially when they are connected to one of the very large tech networks that already exist."


The US Federal Reserve Chairman added:


"You could have a payments network that is immediately systemic but does not offer adequate regulation or protection. The public trusts that the government, and especially the US Federal Reserve, will ensure that the payment system is secure and reliable."

Powell is thus in the run-up to his hearing in the Senate for confirmation as the next US Federal Reserve chairman behind the stance of the Biden administration on digital assets. Powell has served on the US Federal Reserve Board of Governors since 2012 and chaired it since 2018. The new US president decided for him again . This means that he will remain chairman of the central bank until 2026.


Although the US Federal Reserve chairman said that cryptocurrencies are unlikely to be a problem for financial stability in the US right now, he called digital currencies "risky" and "unlinked". Powell has previously raised concerns about cryptocurrencies. He said he was against banning these assets, as China is doing. At the same time, stablecoins must be regulated.



"Stablecoins are like money market funds, they are like bank deposits, but they are outside the regulatory framework to some extent. It would be appropriate to regulate them," Powell said in September. "Same activity, same regulation."

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