United States Federal Reserve chair Jerome Powell opens the door to interest rate hikes next year. Also, Powell is not concerned about cryptocurrencies disrupting financial stability.
It is reported that the inflation rate of the U.S. rose 6.8% in 2021, which is the highest increase since 1982.
The central bank is likely to step up the removal of its efforts to boost the economy. Powell expects Fed policymakers in December to discuss accelerating the timetable for the tapering of monthly bond purchases. This is part of the move to battle escalating inflation pressures.
As a result, crypto traders are keeping a close watch on the Fed. The central bank decides to accelerate the withdrawal of the unprecedented investment stimulus to avoid creating bubbles.
Meanwhile, bitcoin has been an increasingly popular hedge against inflation and economic depression.
Stablecoin Regulation: Fed Not Concern about Crypto Financial Risk
Powell reiterates that stablecoin issuers should be regulated like banks and legislation is “urgently needed” to address risks. The view is the same as the President’s Working Group on Financial Markets.
Powell has worked as the chairman of Fed since 2018. And he will continue to serve in the same role until 2026.
However, he acknowledges the huge potential behind the crypto industry and agrees that if stablecoins are properly regulated, they can certainly be a useful, efficient consumer-serving part of the financial system.
Powell also mentions that it is not likely for the U.S. government to ban all digital assets the way China does.