Cryptocurrencies aren’t a big enough threat, says Federal Reserve Chairman Jerome Powell

Cryptocurrencies aren’t a big enough threat, says Federal Reserve Chairman Jerome Powell 18781
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Sujit Mishra
Jul 19, 2018 at 2:00 AM

Jerome Powell, the chairman of Federal Reserve, has made it clear that he is not very concerned about the rampant growth of cryptocurrencies.

The U.S. Central Bank isn’t looking forward to regulating the estimated $295 billion cryptocurrency market. In a testimony on Wednesday before the House Financial Services CommitteePowell said that the market was not big enough to pose a threat.

See Also: Philippines’ cryptocurrency to be introduced by July-end

Powell further added that the Fed didn't possess jurisdiction over cryptocurrencies and wasn't keen on providing an oversight. Federal agencies such as the Securities and Exchange Commission and Commodity Futures Trading Commission and the state authorities oversee many crypto-related businesses. Many cryptocurrencies that were operating illegally have been shut down by these authorities.

The Fed has said in the past they are keeping a tab on cryptocurrencies as they evolve.

A report published by global financial watchdog Financial Stability Board (FSB) on Monday opined that Bitcoin and cryptocurrencies do not pose a material risk to the international financial system at present. However, the report further added that it is a necessity to diligently monitor cryptocurrencies since the industry has seen a rising number of developments.

See Also: International finance watchdog surprisingly backs Bitcoin, cryptocurrencies

The comments made by Federal Reserve Chairman, Jerome Powell, follow a string of regulatory statements on digital currencies.

The Fed has said in the past they are keeping a tab on cryptocurrencies as they evolve.

The International Monetary Fund (IMF) said in a report, “Cryptocurrency doesn’t appear to pose risks to global financial stability.” The report further says, “they could [pose a risk] should their use become more widespread without the appropriate safeguards.’’

The report says, “It is impossible to know the extent to which crypto assets may transform the financial infrastructure and whether most new crypto assets are likely to disappear as in past episodes of technological innovation (as many tech companies did during the boom of the late 1990s, for example). Before they can transform financial activity in a meaningful and lasting manner, crypto assets will first need to earn the confidence and support of consumers and financial authorities.”

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