The chairman of the Federal Reserve Jerome Powell announced on Tuesday that banks will have autonomy to determine the customer base, signaling the open door for digital assets investors and the introduction of fresh investment products focused on cryptographic assets.
Freedom to engage in cryptographic activities
During his comments Before the Committee for Financial Services, House Powell emphasized that banks are now able to offer banking services specially adapted to the cryptocurrency industry and related companies.
On Tuesday, Powell emphasized that these digital assets must be conducted with an emphasis on maintaining security and reliability for everyday investors.
This advertisement is in accordance with the recent Federal Reserve decision to remove the reputational risk from the criteria of the bank examination on Monday, a change in accordance with similar activities taken by other American regulatory bodies, such as the currency controller (OCC) and the Federal Corporation of Deposit Insurance (FDIC).
Banks expressed concerns that the previous emphasis on reputational risk can lead to subjective judgments of regulatory bodies, potentially punishing institutions for involvement in legally acceptable actions, including cryptocurrency, which does not constitute a significant financial risk.
After the removal of this standard, the Federal Reserve signaled a more soft regulatory environment, enabling financial institutions to be freely involved in projects and offers related to cryptographically.
Inflation forecast
Dealing with broader economic problems that can affect cryptocurrency prices, Powell Highlighted Continuous concerns about inflation, which remains above the target 2%.
The Chairman of the FED noticed that the impact of President Donald Trump’s tariffs on the economy is still uncertain, stating: “Changes in politics are still developing and their impact on the economy remains uncertain.”
Powell explained that the impact of tariffs will depend on their final levels and that historically tariffs have led to a one -time escalate in prices than indefinite inflationary pressure.
As for inflation rates, Powell indicated that the preferred Fed measure will probably escalate to 2.3% in May, with a basic measure – excluding food and energy – expected to the edge to 2.6%.
In April, these numbers were recorded at 2.1% and 2.5%, respectively. Powell and his colleagues from the Federal Committee of the Open Market (FOMC) carefully consider this dynamics and do not feel thrown to adapt the rules until more data are available regarding the impact of tariffs.
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