Federal Reserve Chairman Jerome Powell has said that central banks are “not really seeing significant macroeconomic consequences” from crypto volatility. the Fed chairman said that a more stressed the need for a better crypto regulatory framework.
Fed Chairman Jerome Powell Says Crypto Needs Better Regulation
Federal Reserve Chairman Jerome Powell testified before the Senate Committee on Banking, Housing and Urban Affairs on Wednesday on the Semiannual Monetary Policy Report to Congress.
Senator Kyrsten Sinema (D-AZ) asked him if the Fed tracks crypto activity given recent market volatility and what impact crypto has on the broader economic outlook and monetary policy.
“We are, of course, tracking those events very carefully,” Powell replied, elaborating.
[So far, there has been no significant impact on the macroeconomy.
“The thing is that in this very innovative new space, we need a better regulatory framework,” he stressed.
Powell continued.
The same activity should have the same regulation wherever it appears, which is not the case now.
In March, the Fed chairman said, ” Our existing regulatory framework is not built with the digital world in mind … Stablecoins, central bank digital currencies, and more generally digital finance will require changes to existing laws and regulations or entirely new rules and frameworks.”
Powell also told the Senate Banking Committee on Wednesday that the central bank is determined to bring down inflation, which he believes the Fed can do. ‘At the Fed, we understand the hardship that high inflation brings. We are strongly committed to bringing down inflation and are moving quickly to do so.”
Regarding the possibility of the U.S. economy falling into a recession, he stressed, “We are not going to be able to do that.” That is not our intended outcome at all, but it is certainly a possibility. Frankly, events around the world in recent months have made it more difficult to achieve what we want, namely 2% inflation and a still strong labor market.”
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