Powell Calls for Congress to Act on Crypto Regulation

Federal Reserve Chairman Jerome Powell recently emphasized the need for a more comprehensive regulatory framework for the cryptocurrency industry. Speaking at a press conference, Powell stated that while the central bank is not opposed to innovation or banks engaging with the crypto space, a larger regulatory framework would be beneficial. He suggested that Congress should consider implementing such a framework to govern the behavior of the crypto industry.

Powell's remarks come amid ongoing discussions in Washington about how to balance innovation in digital currencies while ensuring consumer protection. The call for a larger regulatory framework underscores the necessity for coherent policy that can adapt to the rapid evolution of the crypto market. As the industry matures, regulatory clarity could play a crucial role in its stability and growth.

In a separate development, Powell clarified that banks can serve crypto clients as long as they effectively manage the associated risks. This clarification comes amid concerns of crypto debanking and industry crises like the FTX collapse. Powell highlighted the need for a higher threshold of risk management for banks engaging in crypto activities due to their novelty, asserting that the central bank supports innovation. Meanwhile, legislative and legal actions are being taken to address the ongoing debate around banks' services to crypto firms.

These developments highlight the evolving landscape of cryptocurrency regulation and the importance of striking a balance between innovation and consumer protection. As the crypto industry continues to grow and evolve, regulatory frameworks will play a critical role in shaping its future.