While a good number of central banks see bitcoin and other cryptocurrencies as significant threats to their survival, the United States Federal Reserve Chairman, Jerome Powell, said on July 18, 2018, that the exponential growth in the price of bitcoin and the increasing adoption of cryptos doesn’t bother him.
The Fed Won’t Regulate Digital Currencies
According to a Bloomberg report, US Federal Reserve Chairman, Jerome Powell, firmly believes that the burgeoning virtual currency ecosystem doesn’t have what it takes to pose a threat to the country’s finance system. During testimony before the House Financial Services Committee on July 18, the highly reputed Republican and alumnus of Princeton University made it clear that there are more significant issues on the Fed’s table than blockchain-based digital currencies.
Powell also stated that regulating cryptocurrencies is not in the jurisdiction of the US Federal Reserve as the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), along with other regulatory watchdogs present in the state, are providing excellent oversight for the local cryptospace. The US SEC and the CFTC have been quite proactive in their crypto regulatory activities, hammering down many fraudulent initial coin offerings (ICOs) and bitcoin-linked businesses that do not meet their requirements.
Earlier in February, the SEC disclosed that quite many ICO organizers had abandoned their illicit projects because of a simple phone call from regulators. On May 17, 2018, BTCManager reported that the SEC had created a mock ICO, HoweyCoins.com, in a bid to better illustrate to prospective ICO investors what a fraudulent virtual currency-based investment scheme looks like.
The Fed Very Concerned About Bitcoin
It’s worthy of noting that in spite of the latest, somewhat dismissive comments of Powell, the US Federal Reserve has always had a keen interest in the nearly $300 billion cryptocurrency markets. Back in May, the Board of Governors of the Federal Reserve System, led by Lael Brainard, stated at the Decoding Digital Currency Conference that the Fed will continue to point its searchlight on digital assets to study their “potential implications for payments policy, supervision and regulation, financial stability, monetary policy, and the provision of financial services.”
The event, which was organized specifically to discuss cryptocurrencies and distributed ledger technology, was sponsored by the Federal Reserve Bank of San Francisco.