Fed Chair Powell Says Crypto Is Maturing, Signals Openness to Bank Involvement
Federal Reserve Chair Jerome Powell said on Wednesday that Bitcoin and other cryptocurrencies have matured significantly and are becoming part of the financial mainstream. His remarks came during testimony before the Senate Banking Committee on June 25, in response to questions from Senator Cynthia Lummis.
Powell acknowledged that the crypto industry has evolved since the Federal Reserve issued its 2023 policy statement under Section 9(13), which gave the Fed authority to regulate the activities of state-chartered member banks. That guidance had cautioned against banks engaging in certain crypto-related activities, calling them inconsistent with “safe and sound” banking practices.
Now, Powell says both the industry and regulators have gained a better understanding of digital assets.
“The industry is maturing, our understanding of it is improving,” Powell said. “And in a sense, it’s becoming much more mainstream.”
He also emphasized that banks should retain the ability to choose their customers and business models—provided they manage risks responsibly.
“It’s always been appropriate for banks to choose their customers and to be able to undertake activities, as long as they’re safe and sound,” Powell added.
Regarding the 2023 policy guidance, Powell clarified that it was part of a broader regulatory approach, not solely focused on crypto. He confirmed that the Fed is reviewing and potentially withdrawing several crypto-related directives issued during the Biden administration.
Powell’s comments suggest a possible shift toward a more flexible regulatory stance as the crypto sector continues to mature and integrate with traditional finance.
Featured image from: bitcoin.news