Fed: Crypto downturn as a good condition for industry regulation

Fed Chairman Jerome Powell gave his latest comments on the crypto industry. Although maintaining its neutral stance, the market seems to have reacted negatively after that.

In his address to global financial leaders and crypto regulation experts at a conference focusing on central banks and digital currencies held in Paris (France), Mr. Jerome Powell said the ongoing “crypto winter” has had little to no effect on the broader banking system and global financial stability.

In addition, the Fed Chairman shared that the overlap between traditional banking and financial systems, and especially the DeFi sector, which is limited in terms of structure and transparency, should be viewed as a positive signal. extreme for managers.

“This exposes our weaknesses and the work we need to get done. Crypto winter gives us some time to consolidate.”

As DeFi draws more and more retail investors into the market, Jerome Powell reiterated the need for proper regulation of the industry at the conference. In addition to the latest DeFi-focused crypto views, last week, the Fed Chairman also acknowledged stablecoins are “beneficial” for the financial system but must be regulated by law.

In fact, legislators in the US actually failed to pass a stablecoin law in July 2022, yet another strict bill has begun to take shape with the addition of a ban on algorithmic stablecoins. LUNA-UST type. However, the bill would not cover the issuance of a central bank digital currency (CBDC).

Finally, Mr. Jerome Powell revealed that the US has decided not to proceed with the implementation of CBDCs, giving policymakers a few more years to assess policy and technology issues as well as strengthen public confidence. public before going to the next step.

However, right after the Fed President's speech, Bitcoin immediately reacted negatively, falling to the $18,400 region despite a strong recovery on August 28 to above $20,300. At press time, BTC is trading around $18,820.

Fox Crypto News summary

Sep 28, 2022