Jerome Powell: Regulate Crypto

Posted by admin on Friday, October 1, 2021

Jerome Powell Money Quote saying cryptocurrency is similar to money market funds and should be regulated the same. Jerome Powell said:
 

 

“Stablecoins are like money market funds, they’re like bank deposits. But they’re to some extent outside the regulatory perimeter, and it’s appropriate that they be regulated” — Jerome Powell

 

 

In this quote, Jerome Powell seems to be expressing the view that stablecoins, a type of cryptocurrency designed to maintain price stability relative to assets like the U.S. dollar, effectively function similarly to traditional financial products but currently face less regulatory oversight. Specifically:

• Powell notes that stablecoins operate very much like money market funds or bank deposits by aiming to preserve value, yet they exist “outside the regulatory perimeter” to some degree.
• He appears to believe stablecoins effectively serve as cash-like assets for many users in how they are utilized, despite escaping certain regulations that govern comparable traditional financial instruments.
• Powell states it is therefore “appropriate” that stablecoins now experience increased “regulation” to bring them in line with the rules and safeguards applied to analogous mainstream monetary products and services.

The best interpretation is that Powell believes stablecoins have essentially become a substitute for cash and cash equivalents in practice, and to ensure fairness, financial stability and consumer protection, their regulatory treatment should be strengthened to be commensurate with the economic role they now play according to his perspective on the need to modernize oversight for evolving digital asset classes functioning like traditional monetary vehicles.

Here’s the money quote 💸#FederalReserve Chair #JeromePowell very clear that he has no intention to BAN #cryptocurrencies but they will regulate 👇#bitcoin #dogecoin #Ethereum #crypto pic.twitter.com/OAzJbh1pjk

— Susan Li (@SusanLiTV) September 30, 2021

Categories: Fintech Tagged:bankdepositsfundsjerome powellmoney marketstablecoins