Cryptocurrency: Biden’s new Fed may help. The re-nomination of Federal Reserve Chairman Jerome Powell. Has drawn the attention of investors. But analysts believe that future personnel changes. At the central bank will be just as important for the cryptocurrency industry.
The nomination of Governor Lael Brainard to the position of Fed vice chair. Along with President Biden’s promise to appoint progressives. To fill three additional board vacancies in the coming weeks. Is welcome news for those who want to see the Federal Reserve issue a digital dollar. Says Owen Tedford, research analyst at Beacon Policy Advisors. Who believes the Fed should issue a digital dollar.
In comparison to her Republican colleagues, “all of the comments we’ve seen out of Brainard. That are much more pro-digital dollar,” he told MarketWatch. “It’s a win-win for the digital dollar.” The addition of three more Democratic governors to the mix, according to the author.” Moves the needle even farther to her advantage.”
According to Brainard, in a speech delivered in May, a number of factors. Including the growth of private digital money such as bitcoin BTCUSD. -0.02 percent, increased use of digital payments, and foreign experimentation. With central bank digital currency, are “sharpening the focus”. At the Federal Reserve on a potential digital dollar.
In a speech to the National Association for Business Economics in September. She stated that she found it difficult to believe that the United States. Given its position as the world’s dominant currency in international payments. Would not come to the table with a similar kind of offer under those circumstances.
But with three Fed board vacancies
Unlike her fellow governor, the Donald Trump-appointed Christopher Waller. Who labeled the digital dollar “a solution in search of a problem”. In a speech at the American Enterprise Institute in August. She has expressed support for central bank digital currency.
However, with three openings on the Federal Reserve’s seven-member board of directors. President Biden has the opportunity to reform the central bank. In a way that is more favorable of central bank digital currency.
Sarah Bloom Raskin, one of the top candidates for a board member. Has written in support of a digital dollar as a viable instrument. For distributing federal relief money in the wake of the COVID-19 recession. She is one of the most vocal supporters of a digital dollar. Another probable contender, Raphael Bostic, President of the Federal Reserve Bank of Atlanta. Also written about central bank digital money as a potential tool in the promotion of financial inclusion. In a recent article.
The Federal Reserve will also play an essential role in regulating. The links between traditional financial institutions and digital assets. On Tuesday, the Federal Reserve, in collaboration with the Federal Deposit Insurance Corporation. And the Office of the Comptroller of the Currency. Announced that it intends to “offer additional clarification” on how banks. Which may deal with digital assets going forward.
New guidance on whether and how banks can provide crypto-asset safekeeping and custody services. Facilitate client crypto transactions, make loans backed also by crypto assets. And how digital assets should be treated on bank balance sheets. That was promised by Cryptocurrency: Biden’s in a joint statement by the authorities.
Financial authorities “approve crypto activities”
However, strict regulation of banks’ interaction with digital assets isn’t always bad. For crypto in the long run, according to Beacon’s Tedford.
“It will be pro-regulation, including crypto,” he stated. “Long term it’s bullish because it legitimizes, but short term it might be bearish.”
In an interview, Jonathan McCollum, head of government relations. At Davidoff Hutcher and Citron, stated that tighter crypto regulation is expected. But that it might help the business thrive.
“Now that Biden has nominated Powell, I don’t see much else,” he told MarketWatch. In addition, the Treasury Department has produced a report on stablecoins.
Derailed Fed discussion paper on benefits and hazards of creating a digital currency. Due to internal disputes over the proposal.
McCollum, who represents eCurrency, a business that provides central banks. With technology to produce digital currencies, expects lawmakers would eventually support legislation. Allowing the Fed and the Treasury to issue a digital dollar.
“I expect some movement soon,” he remarked. “The House Financial Services Committee and the Senate Banking Committee to the Cryptocurrency: Biden’s. Have also expressed strong support for updating currency laws.”