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‘Ready to Go’: Powell Says Fed Report on Crypto and CBDCs will drop in the coming weeks

Decrypt | Scott Chipolina | Jan 11, 2022

Jerome powell chair federal reserve - 'Ready to Go':  Powell Says Fed Report on Crypto and CBDCs will drop in the coming weeksThe Fed will soon release its insights on CBDCs and the crypto market, and will ask the public for input.

The Federal Reserve's much-anticipated crypto report is "ready to go" and will come out "in the coming weeks," according to Fed Chair Jay Powell.

The remarks came during Powell's re-nomination testimony on Tuesday in front of the Senate Banking Committee, in response to a question about the status of the report from Idaho Senator Mike Crapo.

The report is likely to focus on CBDCs, or central bank digital currencies, which Powell has said the Fed is looking into ever since China launched its own digital yuan. But it sounds possible the report will also look at other crypto issues beyond just CBDCs.

See:  Powell says The Federal Reserve is [still] evaluating whether to launch a CBDC

Powell also said the report will seek input from the public, and it remains unclear if the report will offer any actionable guidance.

Powell on stablecoins

In July last year, he testified before the House of Representatives and said stablecoins should be regulated "in comparable ways" to bank deposits and money market mutual funds.

"We have a tradition in this country where the public's money is held in what is supposed to be a very safe asset," he said, also adding that the regulatory framework for deposits and money market funds "doesn't exist, really, for stablecoins."

See:  Industry warns Congress the U.S. risks ‘chilling’ regulations on crypto

During the July testimony, Powell also addressed Tether, the best-known stablecoin that once claimed it was backed by cash, but has since disclosed that much of its backing comes from commercial paper.

"Commercial paper are short-term overnight obligations from companies, and most of the time they're investment grade, most of the time they're very liquid, it's all good," he said, but added that "the market just disappears" during financial crises.

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