The Federal Reserve’s new chairman Jerome POWELL made a strong point on cryptocurrencies. He does not see cryptocurrencies as a currency In his view, cryptocurrencies have no intrinsic value, are actually not used often as a means of payment, are not a store of value, but are great for money laundering.
Cryptocurrencies are great if you’re trying to hide money or if you’re trying to launder money…it doesn’t really have any intrinsic value so I think there’re investor or consumer protection issues as well.
The FED chairman answered questions about cryptocurrencies in his testimony before the House Financial Services Committee on Wednesday. The committee has jurisdiction over issues related to the U.S. economy, banking system, housing, insurance, securities, exchanges, monetary policy, international finance, international monetary organizations, and efforts to combat terrorist financing.
Powell dismisses the idea that cryptocurrencies could currently pose a significant risk to financial stability. But ho does regard cryptocurrencies as “significant risks” to unsophisticated investors. He pointed out the the FED doesn’t have jurisdiction over cryptocurrency but over banks, adding that the CFTC and the SEC can address the investor protection aspects of crypto.
This week, the Financial Stability Board (FSB) also claimed that “Crypto-assets do not pose a material risk to global financial stability at this time.” The FSB announced Monday that it “has developed a framework and identified metrics to monitor the financial stability implications of crypto-assets markets.” The framework was developed in collaboration with the Committee on Payments and Market Infrastructures (CPMI).
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