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Fed Chair Jerome Powell speaks to reporters at a July 27, 2022 press conference following a meeting of the interest rate-setting Federal Open Market Committee. Federal Reserve photo
While the biggest news to come out of Fed Chair Jerome Powell’s regular testimony before Congress was his willingness to make aggressive interest rate hikes to cool the economy, he also revealed that the central bank is worried about American financial institutions’ work in the crypto space.
Senators from both parties also asked Powell about the Fed’s view on cryptocurrencies and what steps it has taken as a financial regulator on digital assets in the wake of the very public collapse of cryptocurrency trading site FTX.
“What we see is, you know, quite a lot of turmoil,” Powell said. “We see fraud, we see a lack of transparency, we see run risk, lots and lots of things like that.”
As a result, Powell said, the Fed is encouraging the banks it oversees to take “great care in the ways that they engage with the whole crypto space.”
At the same time, he said, “We have to be open to the idea that somewhere in there, there’s technology that can be featured in productive innovation that makes people’s lives better.”
