Jerome Powell, the current Chairman of the Federal Reserve, has stated cryptocurrencies come up a lot at G7 and other international forums, but the Fed doesn’t have any authority over it.
“We don’t have jurisdiction over cryptocurrency,” Powell said before the House of Representatives Committee on Financial Services before adding:
“We have jurisdiction over banks and so we know their activities with cryptocurrency companies and cryptocurrency, we can address that, others can address the… the SEC can address the investor protections aspect of it.”
Asked by Patrick McHenry, Representative for North Carolina, whether that lack of jurisdiction is an impediment to Fed’s monetary policy, Powell replied by stating: “Not at all today.”
The Republican congressman continued to prod on the matter, stating USA currently has “some level of framework around cryptocurrency.”
He mentioned money service license requirements in 52 states, which shows what money goes in and out of crypto. There’s CFTC and SEC, he said, there’s a broad framework, but not a concerted effort by the federal government to understand what’s happening. Do you have any staff resources devoted to crypto, McHenry asked.
Powell said Fed has looked at it carefully, there’s plenty of work going on, “but again we don’t have this regulatory authority to deal with it, so that’s the key thing, it’s to be looking at the places where there is that regulatory authority,” Fed chairman said.
With that point fully clarified by Powell stating in plain terms that Fed has no jurisdiction over cryptocurrencies, but over banks, and has no regulatory authority over cryptocurrencies, the discussion moved on to other matters.
He also insisted that cryptocurrencies, which currently stand at a market cap of around $300 billion with trading volumes of some $20 billion in the past 24 hours, are not big enough to pose any threat to financial stability.