Federal Reserve Chair Encourages Banks to Serve with Crypto
During a recent speech following the Federal Open Market Committee (FOMC) meeting, Federal Reserve Chair Jerome Powell stated that banks are free to engage in crypto activities, as long as they effectively manage the associated risks.
Powell’s Perspective on Crypto Activities
“The threshold has been a little higher for banks engaging in crypto activities, and that’s because they’re so new.”
Despite the cautious approach, Powell emphasized the Fed’s openness to innovation in financial markets.
Addressing Banking Services for Crypto Firms
Powell quickly addressed the concerns about crypto firms facing difficulties in accessing banking services in the US. He reassured that the Fed is not looking to terminate legal customers and is willing to work with the industry.
He also highlighted the Fed’s role in examining the relationship between banks and crypto, acknowledging the regulatory challenges and suggesting the need for a more robust regulatory framework.
Market Response to Powell’s Comments
Although Powell did not explicitly endorse crypto, his brief mention of the industry led to optimism in the market. Following his speech, many assets, including Bitcoin (BTC), rallied after a slight slump.
Bitcoin initially fell 1.5% to $101,417.24 after the FOMC meeting, where no interest rate cuts were announced. However, after Powell’s remarks on crypto, the BTC price rebounded by 3.3% to reach $104,774.44.
As per CryptoSlate data, Bitcoin was trading at $103,740 at the time of writing.
Tone Shift in Regulatory Approach
Powell’s speech comes in the wake of the Federal Deposit Insurance Corporation (FDIC) interim Chair Travis Hill’s acknowledgment of the challenges faced by crypto firms in accessing banking services.
Hill criticized the practice of “debanking” crypto businesses and vowed to change the FDIC’s approach to prevent such incidents in the future.
Congressional Inquiries into Debanking
The House Committee on Oversight and Government Reform is currently investigating cases of crypto firms being debanked. They have sent formal letters to entities related to crypto, requesting evidence and accounts of such incidents.
Bitcoin Market Data
At the time of writing, Bitcoin is ranked #1 by market cap and has seen a 2.98% increase in price over the past 24 hours. With a market capitalization of $2.05 trillion and a 24-hour trading volume of $47.32 billion, Bitcoin continues to dominate the market.
Crypto Market Summary
The total crypto market is currently valued at $3.51 trillion with a 24-hour trading volume of $122.93 billion. Bitcoin dominance stands at 58.53%, indicating its significant role in the overall market.
