Powell Extends Warning Over Crypto Industry And Its ‘Upheaval’

Powell Tuesday laid out a series of concerns he has with crypto, and said lenders should be “very careful” when engaging with it. He said the central bank did not want to stifle innovation.

“We don’t want regulation to stifle innovation in a way that favors incumbents and things like that,” he said during a hearing before the Senate Banking Committee. The crypto space and what we see is quite a bit of turmoil, we see fraud, we see lack of transparency, we see run risk.”

US bank regulators have taken an increasingly aggressive stance on digital assets since crypto exchanges ftx failed Last year. The Fed, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation issued a clear announcement on January 3, stating that crypto-related risks that cannot be controlled should not be allowed to migrate into the banking system.

during Tuesday’s hearing Powell The bank was also under questions about the regulator’s ongoing review of capital requirements.

The amount of money needed to keep banks afloat has become a hot-button issue in Washington. Executives have been arguing that the capital requirements arising from the stress tests could have an undue negative impact on their businesses.

In December, Michael Barr, the Fed’s vice chairman for supervision, said the regulator was taking into account new forms of financial stress as part of a broader look at lenders’ capital requirements.

Asked Tuesday about the review, Powell said the changes would be specific to the institutions the central bank oversees. “We are very strongly committed to tailoring,” he said.

The text of this story is published from a wire agency feed without any modification.