Federal Reserve Governor Michelle Bowman Says “Cryptocurrency Activities Can Pose Significant Risks,” the Fed does not want to “hinder innovation”. She added: “B.By inhibiting innovation, we could push growth in this space towards the non-banking sector, which would lead to much less transparency and a potential risk to financial stability.
Fed Governor on Crypto, US Economy and Inflation
Michelle Bowman, a member of the Federal Reserve Board of Governors, spoke about cryptocurrency, the US economy and the Fed’s efforts to reduce inflation on Tuesday at a Florida Bankers Association leadership event at Miami.
Commenting on the collapse of crypto exchange FTX and other recent events in the crypto space, the Fed Governor said, “These events have clearly demonstrated that cryptocurrency activities can pose significant risks to investors. consumers, businesses and potentially the financial system as a whole.”
Noting that she expects some banks to continue to explore “how to engage in crypto-related activities,” Bowman pointed out:
The Fed and other bank agencies will continue to focus on this area, given the significant risks these activities can pose. But the bottom line is that we don’t want to stifle innovation.
“As regulators, we must support innovation and recognize that the banking industry must evolve to meet consumer demand,” the Fed Governor continued.
“By inhibiting innovation, we could push growth in this space towards the non-banking sector, which would lead to much less transparency and a potential risk to financial stability. We are thinking about some of these questions and what could look like a regulatory approach,” she said.
Regarding the Federal Reserve’s fight against inflation, Governor Bowman said she supported the policy actions of the Federal Open Market Committee (FOMC) to deal with high inflation over the past year. past year. “I am committed to taking further steps to bring inflation back to our target,” she said.
The Fed Governor explained that the FOMC has been tightening monetary policy since last March “through a combination of raising the federal funds rate by 4-1/4 percentage points and reducing our balance sheet holdings.”
While noting that “we have seen a decline in some measures of inflation” in recent months, Bowman pointed out:
We still have a lot of work to do, so I expect the FOMC to continue raising interest rates to tighten monetary policy.
What do you think of Federal Reserve Governor Michelle Bowman’s statements on cryptocurrency and the Fed’s efforts to reduce inflation? Let us know in the comments section below.
Image credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. This is not a direct offer or the solicitation of an offer to buy or sell, or a recommendation or endorsement of any product, service or company. bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.