EFE.- US Federal Reserve Chairman Jerome Powell emphasized Wednesday that cryptocurrencies require the development of new regulations to strengthen protection against “potential concerns about financial stability” amid the rise of these digital currencies.
This was stated by Powell in a speech at a virtual conference organized by the Bank for International Settlements (BIS), based in Basel (Switzerland), on these new financial technologies.
“Our current regulatory frameworks are not built with the digital world in mind (…) Digital finance, in general, will require changes to existing rules and regulations or even completely new rules and frameworks,” he said.
Specifically, he noted that there are “potential concerns about financial stability” because it is not known “how some digital products might behave in times of market stress.”
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Similarly, he warned that many consumers who buy this type of currency, such as bitcoin, “do not fully understand how far their losses can go” or that these “investments lack the protection that accompanies many of the traditional financial instruments they are accustomed to.” .”
This month, US President Joe Biden ordered his government to consider creating a US digital currency, backed by the Federal Reserve.
It will be a central bank digital currency (known as a CBDC, for its English acronym), which is different from cryptocurrencies because they are protected by those financial entities of a country.
Both the Federal Reserve and the US Treasury have repeatedly warned in recent years about the risks associated with cryptocurrencies, which they consider highly volatile and speculative assets.
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