Thursday afternoon during the Oversight of the pandemic response by the Department of the Treasury and the Federal Reserve audience Federal Reserve Chairman Jerome Powell confirmed that the United States has no plans to ban Bitcoin and cryptocurrencies.
During the audience, House Representative Ted Budd (RN.C) questioned President Powell about the state of inflation in the United States. Powell deflected questions about inflation, claiming that inflation in this country is due to frequent supply chain crises caused by the government’s response to the pandemic.
Sure enough, the president said the Fed’s hands are tied when it comes to inflation and relief will come. Powell suggested that inflation should come down in “the first half of next year.”
Ted Budd then cited Powell’s earlier comments on central bank digital currencies and their impact on stablecoins, Bitcoin, and other cryptocurrencies. Budd quoted Jerome Powell from a July hearing: “You wouldn’t need stablecoins, you wouldn’t need cryptocurrencies if you had an American digital currency.”
Budd continued, “So Mr. President, is it your intention to ban or limit the use of cryptocurrencies as we are seeing in China?”
Jerome Powell answered “No” and went on to explain how he had been wrong at the time.
Budd reiterated his question, “But you don’t intend to ban them?”
“There is no intention to ban them,” Powell replied, and went on to explain that stablecoins should be incorporated into the regulatory framework.
For many Bitcoiners, such exchanges in Congress are frustrating to listen to, as the Fed’s understanding of the differences between Bitcoin and cryptocurrencies leaves much to be desired.
However, the incessant bundling of Bitcoin with other cryptocurrencies by the Fed and members of Congress means that we can safely assume that President Powell was also talking to Bitcoin.
From a regulatory standpoint, Bitcoiners and politicians still have a lot of work to do to accurately represent and define where their interests align and, thereafter, make an informed decision on whether and to what extent to regulate Bitcoin.
In any case, the US regulation of Bitcoin remains an adoption of the technology, which from a geopolitical perspective, could not be more different from China’s approach. China’s loss is America’s gain.