Federal Reserve Chair Jerome Powell said he does not intend to ban cryptocurrencies cryptocurrencies, but said stablecoins need greater regulatory oversight in a House Financial Services Committee meeting on Thursday.
The two-hour long meeting, meant to serve as a forum for representatives to ask Treasury Secretary Janet Yellen and Powell about the Treasury Department and Federal Reserve’s pandemic response, featured a number of questions on cryptocurrencies.
Rep. Ted Budd (R-N.C.), a longtime proponent of crypto and a member of the Congressional Blockchain Caucus, requested Powell to make clear statements he had made throughout a July listening to that the event of a U.S. central financial institution digital foreign money (CBDC) may undercut the necessity for personal crypto and stablecoins.
When requested by Budd immediately whether or not or not he supposed to “ban or limit the use of cryptocurrencies,” Powell’s response was a powerful “No.”
“[I have] no intention of intention to ban them,” he mentioned.
Powell’s remarks come simply two days after he requested Congress for session and legislative help to develop the digital greenback. Some within the crypto group have speculated that the institution of a U.S. CBDC would result in bans on personal crypto, as was not too long ago seen in China, however Powell’s remarks recommend in any other case.
When requested about stablecoins, Powell in contrast them to cash market funds or financial institution deposits.
“They’re to some extent outside the regulatory perimeter, and it’s appropriate that they be regulated. Same activity, same regulation,” Powell mentioned.
Rep. Warren Davidson (R-Ohio), additionally a member of the Congressional Blockchain Caucus, remarked on the dearth of regulatory readability surrounding digital property, and requested Yellen to outline digital property for tax accounting functions.
Yellen deflected the query, saying that the Internal Revenue Service (IRS) was within the course of of issuing “detailed regulations that will answer that question.” This upcoming report is one of a number of the Treasury division has promised in current months, together with a highly-anticipated report on stablecoins set to be launched within the coming weeks. An IRS spokesperson referred CoinDesk to the Treasury Department when requested for remark.
The challenge of monetary privateness was additionally a theme at Thursday’s listening to, with three representatives – Reps. David Kustoff (R-Tenn.), Trey Hollingsworth (R-Ind.), and Rep. William Timmons (R-S.C.) – mentioning issues in regards to the IRS’s push to enact new rules requiring banks to report annual inflows and outflows from all accounts with over $600.
Yellen confirmed the IRS’s plans, saying they have been obligatory to handle an estimated $7 trillion tax gap.
“Yes, we have proposed both augmenting the resources of the IRS…so that the IRS gets insight into opaque sources of income.”