Federal Reserve Chairman Jerome Powell said Wednesday that he doesn’t view cryptocurrencies as a “financial stability concern”.
Cryptocurrencies “are really speculative assets,” Powell said in a press conference Wednesday after the Fed said it would accelerate the pace of its tapering of bond purchases and penciled in three hikes of its benchmark interest rate next year.
However, “I don’t see them [cryptocurrencies] as a financial stability concern at the moment,” Powell said. “I do think they are risky, they’re not backed by anything. And I think there’s a big consumer issue for consumers who may or may not understand what they’re getting.”
Powell also highlighted the role of stablecoins, and said he supported the views expressed in the President’s Working Group’s report, which called on Congress to quickly pass new legislation that would require stablecoins to be issued by insured banks.
“Stablecoins can certainly be a useful, efficient consumer serving part of the financial system if they’re properly regulated,” Powell said. “And right now they aren’t.”
“And they have the potential to scale particularly if they were to be associated with one of the very large tech networks that exist,” Powell added.
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