Fed Chairman assures they won’t ban cryptocurrencies as Bitcoin (BTC) edges closer to $50K

  • The Fed Chairman said they have ‘no intention’ to ban crypto but will place appropriate regulations. 
  • Jerome Powell compared stablecoins to market funds and said that they would require regulations as well.

In what can come as a major relief to the U.S. crypto investors, Federal Reserve Chairman Jerome Powell assured that the U.S. Central Bank won’t be banning cryptocurrencies. Powell’s comments came on Thursday, September 30, during his testimony to Congress.

House Representative Ted Budd of North Carolina asked The Fed Chairman “As a matter of policy, is it your intention to ban or limit the use of cryptocurrencies like we’re seeing in China?” Powell said: “No intention to ban [them].”

However, Powell made it clear that it doesn’t mean that the cryptocurrencies would escape any regulatory scrutiny. Pointing to stablecoins in particular, Powell compared them to market funds. Thus he added that stablecoins require regulation. He added:

Stablecoins are like money market funds, are like bank deposits, but they’re to some extent outside the regulatory perimeter and it’s appropriate that they be regulated. Same activity, same regulation.

Powell’s comments come just days after Elon Musk said that regulators can’t kill cryptocurrencies. However, he added that they might slow down the crypto advancement. Elon Musk also opined that the U.S. government should avoid any regulatory action on crypto.

Well, the U.S. knows well that digital currencies can help them keep the economic edge if it has to compete with giants like China. The Asian economic giant has been going hammer and tongs after cryptocurrencies over the last few years. Last week itself, China declared all crypto transactions taking place in the country as illegal. However, post the China ban, institutional investors chipped in to buy the dip.

Bitcoin (BTC) heading to $50,000?

Well, Bitcoin has been showing strength in the last 24 hours. The BTC price is up by nearly 10 percent and is currently trading at $47000 and a market cap heading for $900 billion.

The month of September witnessed a strong selling pressure wherein Bitcoin ended in the red. However, some on-chain fundamentals tell that Bitcoin could soon be starting its journey to $50,000. On-chain data provider Santiment presents good insights into Bitcoin circulation which suggests the future price action. Santiment notes:

Bitcoin circulation is a telling sign as to whether future market price growth can occur. The past 3 days, $BTC is averaging 189.2k unique tokens circulating on the network, the highest since late July (when $BTC grew 31% the following 5 weeks).

Also, data provider Glassnode mentions that Bitcoin entity-adjust transaction volumes have spiked in the last few weeks.

It further adds that large size transactions have been dominating a lot. It writes: “If we investigate the breakdown by transaction size, we can see that very large transactions dominate current transaction flow. 2021 has seen notable growth in large size transaction ($100k+) dominance as institutional capital and higher prices lift USD denominated value”.

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About Author

Bhushan is a FinTech enthusiast and holds a good flair for understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In his free time, he reads thriller fictions novels and sometimes explores his culinary skills.

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