Federal Reserve Chairman Worried About Unlicensed Blockchain

03/08/2023 17:01 • Metaverse Matters • 139 views

According to reports, Federal Reserve Chairman Powell said that he was really worried about the unlicensed blockchain. This is not conducive to maintaining safety and soundness. For the United States, it is important to have a legal framework around digital activities. Under proper supervision, stable currency has a place. That is a matter of Congress, not the responsibility of the Federal Reserve.

Powell: Under proper supervision, stable currency has a place

Analysis based on this information:

The message highlights the concerns of Federal Reserve Chairman Jerome Powell regarding the use of unlicensed blockchain technology. Powell is worried that the absence of a proper legal framework around digital activities could lead to safety and soundness concerns in the United States. The use of stable currency under proper supervision is acceptable, but it is the responsibility of Congress to establish a legal framework, not the Federal Reserve’s.

The use of blockchain technology has grown rapidly worldwide, but the lack of regulation has caused many concerns. The US Federal Reserve does not have direct authority over digital currencies and cryptocurrency as they are decentralized and not backed by the government. However, they oversee banks and financial institutions that use digital currencies. Many countries, including China and Russia, have released their own digital currencies, which have raised concerns about the US dollar losing its status as the global reserve currency.

The Federal Reserve Chairman’s statement reflects the urgent need to address the regulatory gaps in the use of blockchain technology. As a technology, blockchain has been recognized for its potential to streamline processes, increase transparency, and reduce fraud. However, it is becoming increasingly evident that if the technology is not regulated or supervised correctly, it may pose cybersecurity risks and can potentially disrupt the financial system. The Federal Reserve and Congress must work together to develop a legal framework that ensures the safety and stability of the financial infrastructure in the United States.

It is important to note that the Chairman did not outrightly object to blockchain technology but emphasized the need for proper regulation. The message also highlights the need for cryptocurrencies to be backed by a stable currency, which can only happen under proper supervision. This emphasis on regulation is in alignment with the wider trend in the crypto space towards increased regulation and scrutiny, particularly following China’s recent crackdown on crypto mining and trading.

In conclusion, the Federal Reserve Chairman’s message underscores the importance of blockchain regulation and the need for Congress to take the lead on establishing a legal framework. As the world continues to move towards a digital space, the proper regulation and supervision of digital activities are crucial to protecting the safety and soundness of the financial system and maintaining the US dollar’s global reserve currency status.

Overall, the Federal Reserve Chairman’s statement serves as a timely reminder of the importance of regulation in the blockchain space and the vital role of Congress in developing a legal framework around digital activities.

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Federal Reserve Chairman Worried About Unlicensed Blockchain

Powell: Under proper supervision, stable currency has a place

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