On June 24, 2025, Jerome Powell, Chair of the Federal Reserve, testified before Congress, confirming that banks can provide services to crypto firms. This statement marks an important step for the crypto industry.
Powell's Statement and Its Importance
Powell clarified that banks are allowed to offer services to crypto firms as long as proper risk management practices are in place. This assertion has been perceived as a regulatory signal that opens the door for institutional investments in cryptocurrency.
Market Response to Banking Opportunities
On the same day Powell made his statement, institutional investors funneled over $588 million into Bitcoin ETFs and $71 million into Ethereum ETFs. Bitcoin surged past $105,000, briefly reaching a substantial $106,000.
Cryptocurrency Prospects with New Regulations
Powell also voiced support for upcoming stablecoin legislation, such as the GENIUS Act, which aims to regulate stablecoin issuance. Establishing clear guidelines for stablecoins can enhance investor trust and attract more capital into the crypto economy.
The actions of the Federal Reserve and support for stablecoins could alter the dynamics of the cryptocurrency market. Should these innovations drive institutional inflows, they may pave the way for further price increases for Bitcoin and other cryptocurrencies.
