The chairman of the Federal Reserve (FED), Jerome Powell, said that the Regulator of the Central Bank does not want to prevent banks to serve crypto to perfectly legal customers as long as they understand the risks.
During a house committee for the monetary policy of 12 February, Powell said that banks and the Fed “Mindful” should be that crypto activities can be done in financial institutions, which quoted custody as an example. However, he warned banks to avoid going too far in their offer.
He added:
“In fact, there are many crypto activities regulated by FED now. They just happen under a frame [the Fed] Ensured that the bank understood, and we understood exactly what they do. ‘
The comments came after the FED chair was asked if a crypto -collapse could influence the American banking system and whether there are ways to avoid this.
Anti-contact measures
Powell was also questioned about the Silicon Valley Bank (SVB) and characteristic bank incidents. Both banks collapsed in March 2023 due to a combination of factors, such as a lack of diversification, a decrease in the value of their investments in long-term American treasuries and a bankrun.
The banks were known as crypto -friendly, with Circle with $ 3.3 billion from his USD Coin (USDC) reserves with SVB when it collapsed.
However, Powell did not mention a crypto in his answer and attributed the collapse to exposure to long positions in underwater effects and uncovered deposits.
Moreover, he said that the nourish investments made by medium -sized banks with “only characteristics” that are similar to signature and SVB, to ensure that they were not exposed to the same risks in an attempt to infection prevent.
Open to innovation
This is in particular the second time in a month that Powell has confirmed that banks can offer crypto services to their customers.
During his speech after the meeting of the Federal Open Market Committee (FOMC), he said that the Fed is not interested in penetrating the relationship between banks in Crypto. In these cases he added that the role of the Fed is to analyze banks so much.
He too recognized That the “threshold has been slightly higher for banks involved in crypto activities”, which justifies the extra control because of the novelty of the market.
Nevertheless, Powell emphasized that the FED remains open to innovation in financial markets. He also said on 11 February that the US will not spend a digital currency from the Central Bank (CBDC) as long as he is the chairman of the Fed.