Federal Reserve Chairman Jerome Powell addressed concerns over the 'debanking' trend affecting the crypto industry during a Senate hearing on Tuesday, committing to review internal supervision policies. He also clarified the Fed's stance on stablecoins and CBDCs, expressing support for regulation while ruling out the immediate launch of a digital dollar.
Federal Reserve Chairman Jerome Powell addressed concerns over the 'debanking' trend affecting the crypto industry during a Senate hearing on Tuesday. Powell acknowledged the issue, stating that 'one theory is that banks are just very risk averse' about money-laundering rules and aggressive supervision, leading them to avoid customers that might challenge their compliance demands.
He emphasized that the Fed is 'determined to take a fresh look at that' and has been 'struck by the growing number of cases of what appears to be debanking.'\Powell also disclosed that the Fed is removing a policy from its internal manual that directed heightened supervisory scrutiny on bankers engaging in controversial speech or activity. This move suggests a shift in the Fed's approach towards regulating financial institutions, particularly in light of concerns raised about potential censorship within the industry. \While crypto oversight wasn't the primary focus of the hearing, Powell offered insights into the Fed's stance on stablecoins and central bank digital currencies (CBDCs). He expressed support for regulatory frameworks that govern stablecoins, stating that 'stablecoins may have a big future with consumers and businesses,' and emphasizing the need for responsible development to protect consumers and the financial system. Regarding CBDCs, Powell definitively stated 'yes' when asked if he would agree to never launch a CBDC, effectively quashing speculation about a digital dollar in the near future
CRYPTOCURRENCY REGULATION FEDERAL RESERVE DEBANKING STABLECOINS Cbdcs
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