Federal Reserve Chair Jerome Powell emphasized that banks can serve crypto customers and advocates for stronger regulatory frameworks.
During a press conference following a Jan. 29 meeting of the Federal Open Market Committee, Powell highlighted that banks are “perfectly able to serve crypto customers.” Still, he highlighted that this is on the condition that they managed the risks, as ensured by the Federal Reserve. He said:
“We’re not against innovation, and we certainly don’t want to take actions that would cause banks to terminate customers who are perfectly legal just because of excess risk aversion, maybe related to regulation and supervision.”
The details
Powell also highlighted that crypto-specific regulation would help protect retail investors who participate in the market more. He explained:
“I do think it would be helpful if there were a greater regulatory apparatus around crypto, and I think that’s something that Congress was working on quite a lot. We’ve actually spent a lot of time with members of Congress working together with them on various things, and I think that would be a very constructive thing for Congress to do.”
Powell has been heading the Federal Reserve ever since being nominated by United States president Donald Trump during his first term. The comments follow him calling Bitcoin (BTC) — the world’s first cryptocurrency — “digital gold” at the end of 2024. He said at the time:
“People are not using it as a form of payment or a store of value.”
Following Trump’s recent re-election, the United States have been becoming increasingly crypto-friendly. The new president has gone as far as to promise to create a strategic Bitcoin reserve funded by re-evaluating the Federal Reserve’s gold holdings.
The plan calls for buying 1 million BTC — or 5% of Bitcoin’s total supply. At the time of writing, this amount of Bitcoin would be worth just under $105 billion.
