Last Thursday, during the Oversight of the Treasury Department’s and Federal Reserve’s Pandemic Response hearing, Fed Chairman Jerome Powell confirmed that the U.S. has no plans to ban crypto.
Friday saw Bitcoin rise 9% from its price on Thursday, reaching a two-week high of over $48.4k at time of writing on Friday.
U.S. regulatory concerns have been one of several factors that have kept Bitcoin prices down recently. Concerns about indebted Chinese developer Evergrande, the People’s Bank of China’s declaration that crypto transactions are now illegal, as well as concerns about the COVID Delta variant and the still-recovering U.S. market have also contributed to Bitcoin’s recent lows.
The two-hour long hearing gave representatives the opportunity to question Powell and Treasury Secretary Janet Yellen about their agencies’ pandemic responses and contained a number of questions about cryptocurrencies.
During his questioning, Powell said there was “no intention to ban” cryptocurrencies, although he did add that stablecoins “are like money-market funds, they’re like bank deposits, but they’re to some extent outside the regulatory perimeter and it’s appropriate that they be regulated.”
Yellen, however, dodged a question about defining digital assets for tax accounting, saying that the IRS was in the process of issuing “detailed regulations in regards to that question,” without providing additional clarity on the tax status of digital assets, including cryptocurrencies.
A number of reports are set to be released by different agencies this month about cryptocurrency. In addition to the IRS report, a group led by the Treasury Department called the President’s Working Group on Financial Markets is due to release a report later this month. Both Yellen and Powell are members of the group, along with SEC Chairman Gary Gensler.
The report is expected to include recommendations for crypto regulation, specifically with regards to stablecoins and how and whether issuers of stablecoins could be regulated as banks via specialized charters.
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