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Fed’s Powell Says He Won’t Try To Ban Crypto

Jerome Powell, Federal Reserve chair, has clarified previous comments about cryptocurrency, saying he doesn’t want to ban the digital currency, a Bloomberg video says.

Powell said he “had misspoken” in a hearing before the House Financial Services Committee regarding the need for regulating cryptocurrency.

“I didn’t mean to take the word cryptocurrency out of that sentence,” he said. “I would say it’s fairly widely understood that central bank digital currencies could perform some of the … stablecoins are like money market funds, like bank deposits, and it’s appropriate that they be regulated. Same activity, same regulation.”

Powell isn’t the only official to talk about stablecoin regulations. Treasury Secretary Janet Yellen recently said it’s “critical” to regulate stablecoins under some kind of framework.

Officials in the U.S. had planned to introduce recommendations for sealing the various holes in the stablecoin regulation. Yellen had met earlier in the year with the President’s Working Group (PWG) on financial markets, with the meeting turning towards the importance of having eCurrency rules for stablecoins.

Read more: US Treasury’s Janet Yellen Presses For Stablecoin Regulations

In July, the Fed was grappling with how to deal with the scaling back of the low pandemic-era interest rates. The rise of the delta variant over the summer, along with high inflation, had complicated things.

The Fed was concerned at that time about the timing of slowing down the $120 billion in bond purchases every month, which had been put in place to help keep long-term rates low.

Powell had wanted to stage a bet by keeping the Fed’s short-term benchmark close to zero, as it had been since March 2020, to wait for the job market to heal.

The economy was doing well in the beginning of the summer as COVID seemed to be waning, with people making more plans and going out more, stimulating the economy. But the delta variant formed a bump in the road as it caused some people to shy away from going out as much.

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