Fed Chair Powell Comments That Crypto “Appears To Have Staying Power”

By Kevin • June 21, 2023 7:08 pm • Comments

The chair of the Federal Reserve, Jerome Powell, just recently stated something very positive about crypto and specifically said that crypto “appears to have staying power”.

This means that he believes that crypto will likely continue to exist as an asset class in the long term future which can be seen as a very bullish statement.

Powell made these comments as part of a testimony where he talked about the potential of using stable coins as a form of money.

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Of course, he then also touched on the topic of central bank digital currencies which is something that is highly debated on within the crypto community.

The crypto market is still often indirectly affected by the actions of the Federal Reserve, especially during times of high inflation rates.

Watcher.guru reports:

Indeed, Fed Chair Jerome Powell noted in his testimony that “crypto appears to have staying power as an asset class.” Moreover, Powell also discussed stablecoins, noting them as a viable form of money, while also discussing the regulation of the asset by central banks.

“We do see payment stablecoins as a form of money, and in all advanced economies, the ultimate source of credibility in money is the central bank,” Powell remarked. “We believe it would be appropriate to have quite a robust federal role.”

Additionally, Powell noted that the Fed has staff members who have participated in discussions regarding the regulation of digital assets.

Conversely, he discussed the development of CBDCs, which have been a popular point of discussion following the arrival of the FedNow system. Powell states that “we’re a long way from this.”

With Powell pretty much affirming that crypto is here to stay, this may be one of the reasons why the crypto markets have recently experienced a bull run to $30k.

However, Powell also said in his testimony that he sees the creation of a CBDC to be a long road ahead.

Additionally, even if that were to be created, the central bank would have no interest in managing retail accounts which means that they would have to be managed by the banking system instead.

So far, it seems that the Fed has also been in talks with lawmakers about creating appropriate crypto legislation as Powell sees the central bank playing a pivotal role on stable coins in the future.

CoinDesk reports:

Significant crypto legislation hasn’t yet cleared a committee in either the House or Senate in the years such efforts have been discussed.

In questioning Powell, the committee’s ranking Democrat, Rep. Maxine Waters (D-Calif.), said the latest legislative proposal from Republicans would leave the Fed “severely hamstrung” and that it needs to establish a strong federal floor for oversight of nonbank stablecoin issuers.

That’s been a sticking point since negotiations began in earnest last year, because Republicans have sought to ensure a major role for states as stablecoin watchdogs.

Powell also addressed the debate over whether the U.S. should establish a central bank digital currency, saying “We’re a long way from this.”

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