Testifying in Congress, Powell said he had misspoken when he tried to explain the regulator's position regarding the regulation of the digital currencies market earlier in July. The Fed Chair says the financial watchdog "has no intention to ban" cryptocurrencies like bitcoin (EXANTE: Bitcoin) or stablecoins.
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"Stablecoins are like money-market funds, are like bank deposits, but they are to some extent outside the regulatory perimeter, and it is appropriate that they be regulated. Same activity, same regulation," he said.
The cryptocurrency market capitalization has almost immediately reacted on the news surging by almost 6% up to $1.93 trillion. Bitcoin is trading at the $43,922, gaining over 6.15%. Powell's comments come after he said the central bank is working "proactively" to evaluate whether it should issue a CBDC and, if so, in what form. While it remains unclear at what stage the evaluation is, the Fed Chair called not to hurry with the digital version of the US dollar.
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