Federal Reserve Chairman Jerome Powell indicated that regulations concerning banks' activities related to cryptocurrencies may loosen. Powell also emphasized that establishing a legal framework for stablecoins makes sense.
Federal Reserve Chairman Jerome Powell delivered significant messages regarding both cryptocurrencies and economic risks in his statements on Wednesday. Powell noted that digital assets have become more mainstream, stating that restrictions on cryptocurrencies for banks could be partially relaxed. He also emphasized that the legal framework prepared for stablecoin regulation is progressing rapidly.
In his speech at The Economic Club of Chicago, Powell stated that despite the wave of fraud and bankruptcies experienced in the sector in recent years, cryptocurrencies have gained general acceptance. Noting that the previous restrictions imposed on banks were quite cautious, Powell said, 'I think some of these rules will be relaxed.' However, he added that this process would occur in a way that protects consumers and does not jeopardize the financial system.
With the arrival of the Trump administration, U.S. financial regulators have begun to adopt a softer stance towards cryptocurrencies. The FDIC (Federal Deposit Insurance Corporation) announced plans to eliminate the requirement for prior approval for cryptocurrency-related activities. Additionally, the OCC (Office of the Comptroller of the Currency) clarified that federal banks could conduct cryptocurrency-related transactions within a legal framework.
A legal framework for cryptocurrency is coming
The U.S. Congress is rapidly advancing the legislation to regulate stablecoins. Both the House of Representatives and the Senate have passed the relevant bills through their committees. President Trump wants the bill to be presented for signature as soon as possible.
Powell expressed that he views these developments positively, stating, 'Stablecoins are digital products that can be widely adopted. Therefore, it makes sense to support them with regulations that include transparency and consumer protection.'
Impact on the economy and cryptocurrency: Concerns about stagflation
Powell's statements were not limited to cryptocurrencies. Speaking about the new tariffs of the Trump administration, Powell mentioned that these policies could increase inflation and limit growth. This situation may complicate the Fed's ability to achieve both price stability and employment goals simultaneously.
