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Jerome Powell said that banks were “perfectly able to serve crypto customers“ and suggested that lawmakers should act to address the potential risks to households.
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Federal Reserve Chair Jerome Powell addressed a question on crypto after announcing that interest rates would remain unchanged in the United States.
In a press conference following a meeting of the Federal Open Market Committee (FOMC) on Jan. 29, Powell said banks were “perfectly able to serve crypto customers” provided they managed the risks — conditions that were already in place under financial institutions the Fed supervised. However, he hinted that there was a higher threshold for banks looking to engage in crypto activities.
“We’re not against innovation, and we certainly don’t want to take actions that would cause banks to terminate customers who are perfectly legal, just because excess risk aversion may be related to regulation and supervision,” said Powell.
In regard to households considering crypto investments, the Fed chair added:
“I do think it would be helpful if there were a greater regulatory apparatus around crypto, and I think that’s something that Congress was working on quite a lot. We’ve actually spent a lot of with members of Congress working together with them on various things, and I think that would be a very constructive thing for Congress to do.”
Powell was responding to a question about a Financial Services Oversight Council report from December suggesting that stablecoins could present a potential risk to financial stability. The Fed chair has been serving at the central bank since 2018 after being nominated during US President Donald Trump’s first term.
Related: Bitcoin sellers wait at $104K as Fed faces Trump rates pressure at FOMC
The crypto market can often react to interest rate announcements from the US Federal Reserve. Ahead of the FOMC meeting, Trump called on the Fed to cut rates, but the US President does not have the authority to force Powell to comply with his political agenda. He is expected to remain at the Fed until May 2026.
The price of Bitcoin (BTC) rose roughly 3% over the previous 24 hours, briefing moving above $104,000 amid the Fed announcement.
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This article first appeared at Cointelegraph.com News
