We see turmoil, fraud, lack of transparency, ongoing risk – regulation of Bitcoin news

Federal Reserve Chairman Jerome Powell has outlined several risks associated with crypto activities during a hearing before the Senate Banking, Housing and Urban Affairs Committee. While stating that the Fed sees turmoil, fraud, lack of transparency and running risks in the crypto space, he emphasized: “We don’t want regulation to stifle innovation.”

Fed Chairman Outlines Risks in Crypto Activities

Federal Reserve Chairman Jerome Powell answered some questions about cryptocurrency before the Senate Banking, Housing and Urban Affairs Committee on Tuesday. During the hearing, Senator Sherrod Brown (D-OH), the committee’s chairman, asked Powell about the risks posed by crypto assets and how the Fed assesses the risks of crypto-related activities by its supervised institutions.

“We’ve been quite active in this area,” Powell replied. “We believe that innovation is very important over time for the economy. We don’t want to stifle innovation, we don’t want regulation to stifle innovation in a way that just favors incumbents, that sort of thing.” The Fed chair added:

We follow what has happened in the crypto space. What we see is quite a lot of turmoil, we see fraud, we see a lack of transparency, we see that we are at risk – lots and lots of things like that.

“So what we’ve done is make sure that the regulated financial institutions that we monitor and regulate are careful, take great care in the ways they engage in the whole crypto space,” the Fed chairman continued.

Powell noted that the Federal Reserve has issued several joint notices with the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC), warning banks and regulated financial institutions about cryptocurrency risks.

In February, the Fed, FDIC and OCC jointly warned about crypto’s liquidity risk. In January, the three regulators warned: “Banking organizations should ensure appropriate risk management, including board oversight, policies, procedures, risk assessments, controls, gates and railings, and monitoring, to effectively identify and manage risks.”

What do you think about the statements made by Federal Reserve Chairman Jerome Powell about cryptocurrencies? Let us know in the comments section below.

Kevin Helms

A student of Austrian economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects and the intersection of finance and cryptography.