US Federal Reserve will not ban cryptocurrencies, but will introduce regulation for stablecoins

Federal Reserve Chairman Jerome Powell said the US does not plan to ban cryptocurrencies , but he believes it is necessary to strengthen oversight of stablecoins .

Powell made such a statement at today’s meeting of the House of Representatives Financial Services Committee with the participation of Treasury Secretary Janet Yellen. The meeting focused on the topic of pandemic response and included several questions about digital assets.

Longtime supporter of cryptocurrencies and member of the Congressional blockchain working group, Ted Budd, asked Powell to clarify his July statement that the emergence of a national digital currency in the United States would reduce the need for non-government cryptocurrencies and stablecoins.

Budd inquired directly if the Fed was going to «prohibit or restrict the use of cryptocurrencies.»

«No. We have no intention of banning them, ”Powell said.

When asked about stablecoins, the Fed chairman compared them to money market funds and bank deposits.

“Stable coins are similar to money market funds, to bank deposits, but to some extent they are outside the regulatory perimeter. It is quite appropriate to include them in the legal framework. Same activity, same regulation, ” he said.

Warren Davidson, another member of the Congressional Blockchain Working Group , drew attention to the lack of clarity on cryptocurrency regulation and urged Yellen to provide clarifications for tax purposes. The finance minister said the IRS is preparing «detailed regulation that will answer this question.»

Earlier, on September 28, seven members of Congress sent a letter to Powell , which includes four questions regarding the Fed’s attitude to the storage of cryptocurrencies in federal banks, as well as the agency’s role in shaping international standards for the  CBDC .

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