Fed Chairman “likes” crypto downturn: Good conditions for industry regulation

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2022-09-28 20:58:09

Jerome Powell – Fed chairman has made the latest statements about the field of cryptocurrencies. Although this man stated his neutral opinion, the market reacted quite negatively after that.

In a speech to leaders, financial managers as well as crypto experts in Paris (France), the president of the US Federal Reserve mentioned the context of the ongoing “crypto winter”. has little or no significant impact on the broader banking system and on global financial stability.

Mr. Powell further commented on the current overlap between financial systems and traditional banks, especially the limited DeFi array in terms of structure and transparency. These should be seen as positive signals for managers.

“This exposes our weaknesses and the work we need to get done. Crypto winter gives us some time to consolidate.”

Seeing that DeFi is attracting more and more retail investors into the market, the president also emphasized the need to introduce proper regulation for the industry right at the conference. In addition to his views on DeFi, last week, Mr. Powell also spoke out about how stablecoins are beneficial for the financial system.

The US lawmakers, in fact, did not really succeed in passing the stablecoin law in July 2022. Yet another strict bill has begun to take shape with the addition of the LUNA-UST-style algorithmic stablecoin ban. The bill would not cover the issuance of a central bank digital currency (CBDC).

Concluding crypto-related speech, Powell reveals The US has decided not to proceed with the implementation of CBDC. Planners will spend a few more years assessing policy and technology issues. With that, strengthen public confidence before going to the next step.

Immediately after the speech of the Fed President, Bitcoin immediately had a negative reaction, falling to the area of ​​​​18,400 USD despite a strong recovery on September 27 to above 20,300 USD. At press time, BTC is trading around $18,870.

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