At a recent Senate Banking Committee meeting, Federal Reserve Chair Jerome Powell discussed how cryptocurrency is changing.
He said that Bitcoin and other crypto have become more popular and are now accepted by more people. Senator Cynthia Lummis asked about how stablecoin risks have changed since the Federal Reserve’s 2023 policy under Section 9(13), which prompted his comments.
This part allows the Federal Reserve Board to oversee state-chartered member banks. In January 2023, the Fed shared a statement about how it will manage new activities related to crypto-assets, distributed ledger technology (DLT), and stablecoins.
Powell said the Fed’s opinion has changed. He mentioned, “The industry is growing, and we are learning more about it.” He said that regulators are reviewing the decisions made during the early development of cryptocurrency. This reassessment includes more rules that apply to various financial activities, not just those related to crypto.
Powell emphasized that he is okay with banks getting into crypto as long as they stick to safe banking rules. Furthermore, he said banks should choose their customers and follow the rules.
In addition, Powell noted that the Section 9(13) policy statement is part of a group of rules and is not only about crypto. The Federal Reserve is considering changing or getting rid of some crypto rules from the Biden administration.
