Fed Chair Powell on Crypto: We See Turmoil, Fraud, Lack of Transparency, Run Risk
Federal Reserve Chairman Jerome Powell has outlined several risks related to crypto activities during a hearing before the Senate Committee on Banking, Housing, and Urban Affairs. While stating that the Fed sees turmoil, fraud, a lack of transparency, and run risk in the crypto space, he stressed: “We don’t want regulation to stifle innovation.”
Fed Chairman Outlines Risks in Crypto Activities
Federal Reserve Chairman Jerome Powell answered some cryptocurrency questions before the Senate Committee on Banking, Housing, and Urban Affairs on Tuesday. During the hearing, Senator Sherrod Brown (D-OH), the committee’s chairman, asked Powell about the risks posed by crypto assets and how the Fed is evaluating the risks of crypto-related activities by its supervised institutions.
“We’ve been quite active in this area,” Powell replied. “We believe innovation is very important over time to the economy. We don’t want to stifle innovation, we don’t want regulation to stifle innovation in a way that just favors incumbents, that kind of thing.” The Fed chair added:
We are watching what’s been happening in the crypto space. What we see is quite a lot of turmoil, we see fraud, we see a lack of transparency, we see run risk — lots and lots of things like that.
“So what we’ve been doing is making sure that the regulated financial institutions that we supervise and regulate are careful, are taking great care in the ways that they engage with the whole crypto space,” the Fed chairman continued.
Powell noted that the Federal Reserve has issued several joint notices with the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC), warning banks and regulated financial institutions about cryptocurrency risks.
In February, the Fed, FDIC, and OCC jointly warned about crypto’s liquidity risks. In January, the three regulators cautioned: “Banking organizations should ensure appropriate risk management, including board oversight, policies, procedures, risk assessments, controls, gates and guardrails, and monitoring, to effectively identify and manage risks.”
Tags in this story Crypto regulation, Cryptocurrency regulation, Federal Reserve, Federal Reserve Chairman, Federal Reserve Chairman Jerome Powell, jerome powell crypto, Jerome Powell cryptocurrency, Senate hearing, senate hearing crypto, senate hearing cryptocurrency, Sherrod Brown
What do you think about the statements by Federal Reserve Chairman Jerome Powell about cryptocurrencies? Let us know in the comments section below.
SEC Files Emergency Action Against Bkcoin in $100 Million Crypto Fraud Scheme REGULATION | 22 hours ago Ripple CEO Warns of Harm to Crypto Industry if SEC Wins Lawsuit Over XRP REGULATION | 2 days ago
Image Credits: Shutterstock, Pixabay, Wiki Commons
Report: Perth Mint Faces $9 Billion Recall From China Over ‘Doped’ Gold Scandal
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
Read disclaimerShow comments
More Popular News
In Case You Missed It
Central Bank of Brazil Confirms It Will Run a Pilot Test for Its CBDC This Year
The Central Bank of Brazil has confirmed that the institution will run a pilot test regarding the implementation of its proposed central bank digital currency (CBDC), the digital real. Roberto Campos Neto, president of the bank, also stated that this … read more.
Survey: Adoption in Argentina Grows, With 12 out of 100 Adults Having Invested in Crypto Digital Ruble ‘Much Needed,’ Russia’s Central Bank Says, Won’t Delay Testing Iran to Increase Penalties for Unauthorized Cryptocurrency Mining Ethereum Foundation’s Financial Report Discloses It Holds $1.6 Billion in Assets, 80.5% Held in Ether