Jerome Powell calls for cryptocurrency regulation law: What does it mean for the market?

15 February 2024 | 18:13

Jerome Powell Calls for Legislation on Stable Cryptocurrencies

Jerome Powell, the Chair of the Federal Reserve, sparked significant interest during his recent meeting with Democrats from the House Financial Services Committee, which took place on February 12th. The urgent need for legislation regulating stable cryptocurrencies, known as stablecoins, became the central topic of discussion.

The Impact of Cryptocurrencies on Financial Health

During the meeting, Powell emphasized the importance of cryptocurrencies for the financial system and the necessity of creating specific legislation to regulate this issue in the United States. With the increasing popularity of cryptocurrencies, such regulations seem essential to ensure financial stability.

Support for Stablecoin Cryptocurrencies

The Chair of the Federal Reserve also expressed support for the development of stablecoin cryptocurrencies, highlighting the need for legal frameworks that allow for their control and supervision. Powell stressed that regulations in this area are crucial for ensuring financial security.

CBDC and Other Regulatory Areas

During his remarks, Powell also mentioned Central Bank Digital Currencies (CBDC), New York Community Bancorp, and the Basel capital rules. Comprehensive regulation of these areas is paramount for the stability of the financial system.

Expectations Regarding Congressional Regulation

Regulations concerning CBDCs require approval from the US Congress, and final recommendations on this matter are currently being developed. Discussions on Basel capital rules and issues related to the real estate sector affecting New York Community Bancorp were also part of the meeting’s agenda.

The Impact of Powell’s Statements on the Cryptocurrency Market

It is worth noting that Jerome Powell’s statements have a significant impact on the cryptocurrency market. His comments, such as those regarding Bitcoin in June 2023, have the ability to substantially alter the value of individual digital assets.