Fed Chair Jerome Powell: ‘Banks Are Perfectly Able to Serve Crypto Customers, It’s Safe’

Federal Reserve Chair Jerome Powell Jerome Powell   Jerome Powell is a U.S.-based fintech specialist and the current head of the U.S. Federal Reserve. He was named the 2020 Forbes Person of the Year in Crypto award as a result of the high price gains in cryptocurrencies.   He has neither supported nor downvoted the concept of cryptocurrency adoption in the country. However, his expertise mainly talks about formulating fair and friendly crypto polices in the country.   Quick Facts   Full name Jerome Hayden "Jay" Powell Birth 04-02-1953, Washington, D.C., United States Nationality American Education Georgetown University Law Center Known for Banking Expert   Jerome Powell - Career Highlights & Events   2018: He was designated head of the Federal Reserve.   2021: Stressed the need for strict regulation while acknowledging the potential of stablecoins.   2022: Research on the economic impact of U.S. CBDC was initiated.     Finance addressed concerns raised in the Financial Stability Oversight Council’s annual report, particularly regarding the risks of cryptocurrency. Powell was asked whether speculation in this unregulated asset class could harm individuals’ financial well-being, especially in contrast to the broader concerns about the financial system.

Banks Can Serve Crypto Customers, Says Powell

Powell said that the Federal Reserve’s primary role is to oversee how banks interact with cryptocurrencies. He noted that banks can serve cryptocurrency customers as long as they understand and manage the associated risks, ensuring their operations remain safe and sound. Many banks under the Federal Reserve’s supervision are already engaging with crypto in a secure manner. However, Powell pointed out that banks face higher thresholds when it comes to crypto activities due to the relatively new nature of digital assets.

“Banks are perfectly able to serve crypto customers as long as they understand and can manage the risks. And it’s safe and sound, as a good number of our banks that we regulate and supervise do that. The threshold has been a little higher for banks engaging in crypto activities. And that’s because they’re so new,”

He Explained.

He explained that if a bank decides to offer crypto services, it must ensure the activity is fully safe, as it operates under the federal safety net, including deposit insurance. The Fed’s cautious approach aims to prevent risks to the broader financial system while supporting innovation. Powell reiterated that the Fed is not opposed to cryptocurrency innovation, but it seeks to prevent overly cautious regulations from unduly disrupting legitimate business activities.