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No Intention To Ban Cryptocurrencies – U.S. Federal Reserve Chairman.

Chairman of the Federal Reserve in the United States, Jerome Powell, has stated that cryptocurrencies would not be banned, but that stablecoins will require more regulatory monitoring.

Powell made the remarks at a two-hour hearing before the House Financial Services Committee on Thursday. The discussion, which was intended to provide legislators with an opportunity to question Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell about the Treasury Department’s and Federal Reserve’s pandemic response, included numerous queries concerning cryptocurrency.

Rep. Ted Budd (R-N.C.), a longstanding crypto supporter and member of the Congressional Blockchain Caucus, requested Powell to explain comments he made during a July hearing that the establishment of a US central bank digital currency (CBDC) may reduce the need for private crypto and stablecoins.

Powell responded with a loud “No” when questioned directly by Budd if he planned to “ban or limit the usage of cryptocurrencies.”

Powell’s comments came only two days after he requested congressional input and support for the development of the digital dollar. Some in the crypto world have hypothesized that the formation of a US CBDC will result in private crypto prohibitions, similar to what has recently occurred in China, but Powell’s comments imply otherwise.

Powell compared stablecoins to money market funds or bank savings when questioned about them.

Rep. Warren Davidson (R-Ohio), who is also a member of the Congressional Blockchain Caucus, expressed concern about the lack of regulatory certainty around digital assets and urged Yellen to define digital assets for tax reasons.

Yellen dodged the topic by claiming that the IRS was working on “detailed rules that would resolve that question.” The Treasury Department has promised numerous reports in recent months, including a widely awaited report on stablecoins, which will be issued in the coming weeks. 

Concerns about privacy

Three members of Congress – Reps. David Kustoff (R-Tenn.), Trey Hollingsworth (R-Ind. ), and William Timmons (R-S.C.) – raised concerns about the IRS’s drive to adopt new laws forcing banks to disclose annual inflows and outflows from all accounts with over $600.

Yellen acknowledged the IRS’ plans, claiming that they were required to close a $7 trillion tax shortfall.

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