Fed Chairman Says Crypto Winter Is Helping Regulators

For Jerome Powell, the crypto winter helps regulators as they have extra time to address the issue. The reason for this is the declining interest from investors, while the market has been at a strong low for almost a year.

On the occasion, Powell spoke directly about stablecoins and the DeFi industry. His speeches took place at a conference organized by the Central Bank of France this Tuesday (27). Other important figures such as Christine Lagarde, president of the European Central Bank, were also present.

Today, many attribute the decline in the markets – crypto as well as shareholders – to the Fed’s own monetary policy. After all, raising the base interest rate to keep inflation in the US under control is driving investors away.

Jerome Powell On Cryptocurrency Regulations

As the US and other countries rushed to enact cryptocurrency laws while attracting public attention, a sharp decline in the markets appears to have slowed down such adoption, giving regulators more time to work on the issue.

At a conference in Paris on CBDCs and digital currencies, Fed Chair Jerome Powell took the opportunity to speak on the topic.

“In the DeFi ecosystem, there are these very important structural issues around transparency, lack of transparency. The good news is that the interaction between the DeFi ecosystem and the traditional financial system isn’t that great right now.”

“We witnessed the DeFi winter, but it didn’t have significant effects on the banking system, on broader financial stability, and that’s a good thing and I think it shows the weaknesses and the work that needs to be done around regulation.” , diligent.”stated Jerome Powell.

“Ultimately, this is not a stable balance. We have to be very careful about how cryptocurrency activities are conducted within the legal perimeter”concludes the Fed chairman. “However, wherever they belong, there is a real need for better regulation as DeFi expands and starts to reach more retail customers, there should be adequate regulation.”

“[Esse inverno] give us some time. This situation will not continue indefinitely.”

With regard to the fact that cryptocurrencies pose a risk to financial stability, this point had already been identified as a risk by other agencies, such as the IMF, during the 2021 bull run.

In any case, the US Central Bank president’s speech seems like a warning that another cryptocurrency boom will emerge in the future and when it does come, broader laws should already be in place.

Source: Live Coins