Federal Reserve Chairman Jerome Powell says that he doesn’t see cryptocurrencies as a monetary stability concern. However, he famous that they’re dangerous and “there’s big consumer issues for consumers who may or may not understand what they’re getting.”
Fed Chair Powell Says Cryptos Are Risky but Currently Not a Financial Stability Concern
Fed Chairman Jerome Powell talked about cryptocurrency in a press convention Wednesday. Commenting on whether or not cryptocurrencies are a risk to the nation’s monetary stability, he stated:
I don’t see them as a monetary stability concern in the meanwhile. I do assume they’re dangerous. They’re not backed by something.
“I think there’s big consumer issues for consumers who may or may not understand what they’re getting,” Powell continued, including that “There are certainly developments in the markets that are worth following, which are really not in our jurisdiction.”
Powell additionally mentioned stablecoins. He famous that he helps the view expressed within the President’s Working Group’s report, which recommends stablecoin issuers be regulated like banks.
Noting that “Stablecoins can certainly be a useful, efficient consumer-serving part of the financial system if they’re properly regulated,” the Fed chair pressured that “Right now, they aren’t.” Powell concluded:
They have the potential to scale, significantly in the event that they had been to be related to one of many very massive tech networks that exist.
This week, the Bank of England issued a monetary stability report stating that crypto property “currently pose limited direct risks to UK financial stability.” However, the report warns that “they will present a number of financial stability risks if they continue to grow at their current rapid pace, and as they become more interconnected with the wider financial system.”
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