New Fed Chair Takes His Seat; Crypto Players Await His Moves on Space
New Fed Chair will have to deal with cryptocurrencies, and what, if any, regulations to impose.
Jerome Powell was sworn in as chair of the U.S. Federal Reserve Monday, and his seating is significant to cryptocurrency players given his ability to impose restrictions on the space.
On his first day on the job, Powell didn’t address anything to do with cryptocurrencies, even though the space was dominating headlines due to the hefty price falls cryptos have experienced since the beginning of the year.
However, that does not in any way mean that the space will not be on his radar screen. This is especially the case as regulators worldwide are increasingly looking at the space because of bad actors, and the wild price swings.
Furthermore, Powell has previously indicated in his role as a member of the Federal Reserve Board of Governors that the space is one that is being monitored very closely.
He is taking over the chair position from Janet Yellen.
Powell has not indicated that he will call for any specific regulations concerning cryptocurrencies. He has said:
“[We have] nothing against Bitcoin, and nothing against private currency. We generally look at some of the risks from cryptocurrencies associated with money laundering and those sorts of issues. But we’re not broadly opposed or supportive of alternative currencies.”
Some have fretted about the potential impact the volatility of cryptos could have on economies. This is one of the things Powell has commented on.
Take for example Bitcoin’s market cap, which is about $126 billion. While that is considerable, Powell has said Bitcoin’s market size, nor that of the entire crypto space, were big enough so that a fall in their valuations would be enough to destabilize an economy.
During his confirmation hearing before members of Congress in November, he said:
"They don't really matter today; they're just not big enough. There isn't close enough volume to matter. There is no question valuations have gone up quite a lot in the last year or so. In the long, long run, cryptocurrencies of that nature could matter, but they don’t really matter today.”
Positive on Blockchain
While Bitcoin and other cryptocurrencies are grabbing all the attention right now, it’s been Blockchain that’s enjoyed consistent positive reviews. The technology is also one of the positives of the crypto space that has grabbed Powell’s attention.
We actually look at Blockchain as something that may have significant applications in the payments part of the economy. That’s something we pay close attention to.”