The Fed has 'no intention' to ban cryptocurrencies, Jerome Powell tells Congress

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Jerome Powell Senate Banking testimony
Federal Reserve Chair Jerome Powell. Kevin Lamarque/Reuters
  • Fed Chairman Jerome Powell told Congress that the central bank has "no intention" to ban cryptocurrencies.

  • The answer came in response to a question from House Representative Ted Budd of North Carolina.

  • But Powell also said stablecoins need to be regulated, calling them similar to money market funds.

  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

The long-held belief of cryptocurrency bears that the US government will outright ban the sector, akin to the government making it illegal to hold gold in 1933, was put to the test on Thursday.

Federal Reserve Chairman Jerome Powell testified to Congress on Thursday that the central bank has "no intention" to ban cryptocurrencies. The answer came in response to a question from House Representative Ted Budd of North Carolina.

"As a matter of policy, is it your intention to ban or limit the use of cryptocurrencies like we're seeing in China?" Budd asked Powell.

Powell responded, "No intention to ban [them]."

That's not to say Powell thinks they should avoid regulation, which SEC Chairman Gary Gensler has urged. Powell pointed to stablecoins in particular, calling them similar to money market funds, which need to be regulated.

"Stablecoins are like money market funds, are like bank deposits, but they're to some extent outside the regulatory perimeter and it's appropriate that they be regulated. Same activity, same regulation," Powell said.

The comments come as the Fed continues to study the potential use cases of a central bank digital currency similar to cryptocurrencies.

Read the original article on Business Insider