The cryptocurrency market has finally received a boost from Federal Reserve Chairman Jerome Powell, after a wave of losses from China’s tightening.
Federal Reserve Chairman Jerome Powell has denied the central bank’s intention to ban cryptocurrencies, with China recently issuing a similar decision.
“Do you intend to ban or restrict the use of cryptocurrencies as we see in China?” Powell, nicknamed “the economic fox,” answered a question by a senator during his testimony before Congress. He said, “There is no intention to ban it.”
Last Friday, China’s central bank declared all cryptocurrency transactions “illegal” and vowed to take strict measures, including bans, against its activities.
The bank said it would crack down on illegal cryptocurrency trading activities, and banned overseas exchanges from providing services to mainland investors online.
10 Chinese authorities, including the People’s Bank of China, the China Cyberspace Administration and the Ministry of Public Security, decided to launch a “coordination mechanism” to prevent financial players from participating in any cryptocurrency transactions.
Huobi, China’s largest bitcoin exchange, decided to stop any new registrations of users from within the country, the first measure it took in line with Beijing’s recent decision to ban digital transactions.
But “Powell” explained that stablecoins are similar to money market funds and bank deposits, noting that they are outside the regulatory scope and need to adjust their dealings.
Stable currencies are cryptocurrencies that are tied to stable assets such as the US dollar or the euro, and are therefore considered less volatile than other digital assets.
The Federal Reserve recently announced that it is studying the possibility of launching a central bank digital currency, and is releasing a research paper on this matter this year.