Federal Reserve Chairman Jerome Powell comments on cryptocurrency, Libra

19 Jun, 2019
by David Borman
Federal Reserve Chairman Jerome Powell comments on cryptocurrency, Libra

Today the Federal Reserve decided that it would not be raising interest rates, and just after this decision Federal Reserve Chairman Jerome Powell held a press conference to discuss the announcement. During this conference he was asked about the threat of cryptocurrency replacing traditional bank currencies, as well as the Reserve's role in regulating the Libra, Facebook's newly announced asset.

Powell: Facebook discussed new cryptocurrency, Libra, with Fed from CNBC.

The clip above opens with Powell addressing the idea of whether digital currencies could replace existing ones, to which he had this to say:

"On your specific question, of um, digital currencies replacing central bank currencies, um, I think we're a long way from that... Digital currencies are in their infancy."

He then goes onto reveal that he belives Facebook has "made quite broad rounds" with regulators around the world, implying the company has been discussing the inevitable regulations concerning its Libra coin with financial policy makers in various countries.

Powell then makes some generalizations about the potential risks as well as benefits coming from the Libra, and affirms that there will be "high expectations" surrounding the asset concerning safety and regulation.

The next question is to how the Federal Reserve may be involved in regulating the Libra, to which Powell responds:

"We don't have plenary authority over cryptocurrencies as such, they play into our world through consumer protection and money laundering, and things like that."

Powell then affirms that despite this, the Reserve still plays a major role in monetary policy in the United States.

The discussion then moves onto other concerns, but the whole video is worth a watch. It sounds like there is not a lot of urgency on the part of the Federal Reserve to take action on crypto yet, but they are not the only relevant body involved even in just the US government.

Will there be further elaboration on Facebook's new coin or crypto as a whole coming soon? If there is, stay right here with Chepicap for all updates!

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