At a recent Senate Banking Committee meeting, Federal Reserve Chair Jerome Powell addressed the evolving landscape of cryptocurrency and the prospect of regulatory changes.
Changes in Federal Reserve's Position
Jerome Powell highlighted the increasing acceptance of Bitcoin and other cryptocurrencies, noting that more people are adopting them. He pointed out the need to reassess initial decisions made during the early development of the cryptocurrency sector.
Discussion on Stablecoins
Powell also addressed concerns related to stablecoins, particularly the risks and regulatory changes under the Federal Reserve's 2023 policy. Senator Cynthia Lummis inquired about how stablecoin risks have evolved.
Future Regulations and Oversight
Powell indicated that banks could engage in cryptocurrency activities as long as they adhere to sound banking practices. He mentioned that some cryptocurrency rules may be revised or eliminated, given the new approach of the Biden administration.
Thus, the Senate Banking Committee hearing underscored the Federal Reserve's shifting stance on cryptocurrency and stablecoins, which may lead to a new phase of regulation in this area.
