The Federal Reserve and the Treasury Department turning up the warmth on cryptocurrency, signaling a crackdown might be coming after a number of days of volatility within the sector.
Fed chair Jerome Powell said in a uncommon video message posted Thursday that cryptocurrencies, which have grown to have a market cap of practically $2 trillion, pose some dangers to each particular person traders and the broader monetary system.
He additionally distinguished between volatile cryptocurrencies and so-called stablecoins, that are tied to the worth of different currencies such because the US Dollar.
“As stablecoin’s use increases, so must our attention to the appropriate regulatory and oversight framework,” Powell stated, noting that companies that course of crypto funds might be some extent of extra regulation.
Powell additionally famous that the Fed is exploring how and whether or not cryptocurrencies may enhance the present US monetary system. He stated the Fed has been exploring whether or not it ought to set up cryptocurrency of its personal, known as a central financial institution digital foreign money, or CBDC.
He stated the Fed will publish a dialogue paper this summer time on the advantages and dangers of creating a CBDC, and can search public remark.
“We think it is important that any potential CBDC could serve as a complement to, and not a replacement of, cash…
