Federal Reserve Chair Jerome Powell stated that cryptocurrencies are rapidly becoming part of mainstream finance, supporting the idea of developing a legislative framework for stablecoins.
Shift Toward Mainstream Adoption
Speaking At the Economic Club of Chicago, Powell noted that past crypto scandals once drove strict banking restrictions. He said, “There’ll be some loosening of that [crypto-related banking guidance],” to adapt policies. Powell remarked that evolving market conditions warrant fresh policy review.
Legislative Progress on Stablecoins
Powell said, “Congress is again looking at both the Senate and the House [for] a framework, a legal framework for stablecoins,” noting that clear rules could reduce uncertainty and encourage market trust. He added that consumer protections and transparency must be included.
Banking Participation and Oversight
Relaxed guidance could permit banks to custody crypto assets and handle stablecoin payments. Powell noted that such steps follow a risk-based approach to protect depositors. Furthermore, banks may expand digital asset services, attracting additional institutional capital.
Jerome Powell emphasizes the importance of adapting legislative and regulatory approaches to the rapidly evolving cryptocurrency market, ensuring safety and innovation in the financial system.
