According to Jerome Powell, president of the FED, there would be no intention to ban the Bitcoin, following in the footsteps of the China. The number one of the Federal Reserve pointed this out in the course of one hearing at the House Committee on Financial Services. Which had been convened with the intention of examining the response given by the Department of the Treasury and the FED in the face of the situation created by the Covid pandemic.
Powell's response came on a solicitation from Ted Budd, Republican representative of North Carolina. And it seems to be able to put an end, at least for the moment, to the many rumors that have been chasing each other over the last few months, relating to the possibility of a Bitcoin Ban by the Washington government.
The statements of Jerome Powell
Ted Budd, in putting his question to Powell, referred to statements made by the chairman of the Federal Reserve during a previous hearing. On that occasion, however, there was mention of stablecoin, not cryptocurrencies. Deemed by Powell on a par with bank deposits and which, consequently, should be regulated in the same way.
Adding that the stablecoins, starting with , are digital assets designed with the specific intent of achieving parity with a fiat currency. The operations connected to Tether, however, they create a certain uneasiness in that USDT it is not fully backed by US dollars in a bankbut a mix of real dollars and other assets, including debt in the form of commercial paper. A situation that can hold up in normal times, but certainly not when a crisis breaks out. In that case, many people could ask for their money back. Triggering an extremely dangerous situation.
Regulate, don't ban
The very possibility that such an event could happen must be dealt with in advance by the institutions. Trying to better regulate the sector, making sure that savers can have the guarantee of getting their money back at any time.
An opinion which, moreover, was shared by Cynthia lummis, the Republican senator from Wyoming known for her belief in Bitcoin and digital money. According to which it would be necessary to ensure that stablecoins can be issued exclusively by depository institutions or through money market funds and other similar instruments. Then adding that they must be supported 100% by cash and cash equivalents. By putting in place regular checks aimed at verifying that everything is regular.
The regulation on stablecoins is in the pipeline
Powell's words come close to the publication of the new regulation concerning stablecoins. The chairman of the Federal Reserve, in fact, worked in concert with the secretary of the Treasury Janet Yellen on a draft that should see the light in the next two weeks.
Which, however, should not touch the most volatile assets, starting with Bitcoin and Ethereum. A scruple that China has not set itself, with its Bitcoin Ban. Which continues to be discussed, as is logical.
The move by the People's Bank of China was in fact also commented on by Elon Musk, during the recent Code Conference held in California. During which the Tesla CEO stated that in all likelihood the Beijing government intended to put a barrier against the dangers of mining. Which has jeopardized the environmental remediation objectives of the eastern giant, pushing it to an apparently extreme act.