Federal Reserve Chairman Powell Stresses Need for Regulatory Framework for Cryptocurrency

03/08/2023 15:39 • Tech Ticker • 151 views

Federal Reserve Chairman Powell Stresses Need for Regulatory Framework for Cryptocurrency

It is reported that Federal Reserve Chairman Powell once again called for a clear regulatory framework for cryptocurrency. Federal Reserve Chairman Powell said that US state governments should also play an active role in the regulation of cryptocurrency. The issuance of retail central bank digital currency (CBDC) requires congressional approval.

Federal Reserve Chairman Powell once again called for a clear regulatory framework for cryptocurrency

Analysis based on this information:

Federal Reserve Chairman Jerome Powell has once again emphasized the importance of establishing a clear regulatory framework for cryptocurrencies. He has called for the involvement of not just federal regulatory bodies, but also state governments. This emphasis comes amid growing concerns about the potential risks posed by cryptocurrencies to both individuals and the wider financial system.

While cryptocurrencies offer many benefits, including decentralization, security, and speed of transactions, they also present a number of significant challenges. In particular, the lack of clear regulatory oversight has made it difficult to ensure that cryptocurrencies are not misused for illegal activities like money laundering or terrorist financing.

Chairman Powell has been vocal in his support for a clear regulatory framework for cryptocurrencies since taking office as Federal Reserve Chairman in 2018. He has recently reiterated this view, calling on state governments to play a more active role in regulating the cryptocurrency sector. This could involve working with federal agencies to craft laws and regulations that are appropriate for the unique characteristics of cryptocurrencies.

In addition to advocating for greater state involvement, Chairman Powell has also emphasized the importance of congressional approval for the issuance of any retail central bank digital currency (CBDC). A CBDC is a digital version of a country’s traditional currency that is issued and controlled by the central bank. This would allow central banks to more easily monitor transactions and prevent illegal activity.

In conclusion, Chairman Powell’s message underscores the vital importance of creating a clear regulatory framework for cryptocurrency. As the use of these digital assets continues to grow, it is vital that federal and state governments work together to establish a system that protects both individuals and the financial system as a whole. Additionally, given the potential for a government-issued digital currency to provide a more secure and efficient means of payment, congressional approval will be crucial in ensuring any CBDC is implemented safely and effectively.

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