Washington, D.C. – June 26, 2025 — Bitcoin saw a notable surge on Wednesday after Federal Reserve Chair Jerome Powell testified before the Senate Banking Committee, signaling that the stablecoin industry has "matured step by step" and may now warrant clearer regulatory integration into the broader financial system.
During a wide-ranging discussion on the state of monetary policy and digital assets, Powell acknowledged that stablecoins — once viewed with skepticism by regulators — have evolved into "important financial instruments" with increasing relevance for payments and cross-border transfers.
> “We’re seeing significant progress in the stablecoin space,” Powell said. “While concerns remain around reserve transparency and systemic risk, the market has matured step by step, with some players now operating at institutional-grade standards.”
Bitcoin responded swiftly to the remarks, rising over 4% within hours to trade above $70,000 — its highest level in two weeks. Analysts attribute the rally to growing investor confidence that regulatory clarity on stablecoins could also bolster the broader digital asset ecosystem.
Regulatory Shift in Tone
Powell's testimony reflects a notable shift from earlier positions taken by the Fed and other agencies, which had warned of the potential dangers of privately issued stablecoins. His comments suggest that the Fed may now support a framework that allows stablecoins to coexist alongside central bank digital currencies (CBDCs) — or even complement them.
“Instead of seeing stablecoins as threats, regulators are beginning to view them as tools that, when properly supervised, can enhance financial innovation and efficiency,” said Laura Shin, a crypto industry analyst.
Market Implications
The broader crypto market also saw gains following Powell’s remarks. Ethereum climbed 3%, while leading stablecoin issuers such as Circle and Paxos issued statements welcoming the acknowledgment of their operational progress.
Crypto advocates argue that stablecoins have become essential to the liquidity and functioning of digital markets. Powell’s recognition of their maturation may pave the way for more robust legislation, including requirements for capital backing, regular audits, and oversight under federal banking laws.
Looking Ahead
Powell stopped short of endorsing any specific stablecoin legislation but hinted that collaboration with Congress and financial regulators would be key in shaping future policy.
“We want innovation to flourish,” he said. “But we also need to ensure the safety and soundness of the financial system.”
With the 2024 elections now behind and bipartisan interest growing around digital asset regulation, Powell's remarks may mark a pivotal turning point in how Washington approaches crypto — with Bitcoin and the broader market watching closely.