United States FED Chairman Powell Offers Support For Digital Assets, Highlights Risks

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United States FED Chairman Powell Offers Support For Digital Assets, Highlights Risks

Current Chairman of the Federal Reserve Jerome Powell recently revealed that he views the United States central bank as one of the key supporters of innovation in digital financial products. However, in the same breath he warned that certain technologies and innovations, including cryptocurrencies, embody certain risks that need to be addressed before wide spread adoption is possible.

By Andrew Senior
March 24th, 2022




Speaking on Wednesday as part of a panel discussion with other central bank governors hosted by the Bank of International Settlements, Mr. Powell highlighted the necessity to change existing laws and regulations to provide safeguards for the overall financial sector while integrating the new world of financial digital innovations.


Mr Powell commented that,


“There are potential financial-stability concerns for some products. We don’t know how some digital products will behave in times of market stress.”


Powell went on to say that it was “easy to see the risks” related to digital assets that require new rules and regulations. The United States has thus far been somewhat indecisive with its approach towards cryptocurrencies, including current President Biden signing an executive order earlier this month that was met with controversy and confusion.


Powell has been both a cautious supporter of digital assets and a vocal proponent of the need for new and improved rules designed to understand the inner workings of cryptocurrencies and provide oversight to the market.


He went on to say that it is “highly likely” that carious digital financial products, currently sitting outside the regulatory perimeter, will soon be “brought within it.” Powell described this as a necessary step to “level the playing field, keep [the] trust of users, protect consumers, and all of that.”


Last year, Powell offered reassurance to the crypto industry that the US had no intentions in following suit with China and implementing an all-out ban on digital asset operations.


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