The chairman of the Federal Reserve (Fed), Jerome Powell, stressed on Wednesday that cryptocurrencies require the development of new regulations to strengthen protection against potential concerns for financial stability in the midst of the boom of these digital currencies.
This was stated by Powell in a speech at a virtual conference organized by the Bank for International Settlements (BIS), based in Basel (Switzerland), on these new financial technologies.
According to Powell, current regulatory frameworks were not designed with a digital world in mind, so digital finance, in general, will require changes to existing rules and regulations.
This month, President Biden ordered his administration to evaluate the creation of a Fed-backed digital currency.
This would be a central bank digital currency (known as a CBDC), which is different from cryptocurrencies in that they are backed by a country’s financial institutions and centrally controlled by the government.