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  • Writer's pictureP Xenos and M Bacina

US Federal Reserve Chairman shows support for private crypto transactions

Updated: May 2

Chairman of the US Federal Reserve, Jerome Powell has come out in favour of private cryptocurrency transactions in his recent comments to the House of Representatives Committee on Financial Services.

He has told the Committee that the Federal Reserve are currently "working hard" on embracing efforts involving digital currencies and even went as far to reinforce that the end goal is to digitize the US dollar someday.

These comments are in line with the United States Federal Reserve Governor Lael Bainard's recent statement that the U.S. central bank is currently "advancing its understanding" of central bank digital currencies (CBDCs).

Powell also made an apparent policy reversal in his full statement, arguing that the government has no interest in having any knowledge of individual's payments, claiming that it is “not something that would be particularly attractive in the context of the U.S.”

This is a clear volte-face from the Trump administration’s dismissive, and disdainful rhetoric towards the anonymity of cryptocurrency transactions, with the U.S. Treasury Secretary Steven Mnuchin saying in a statement in July:

Cryptocurrencies like Bitcoin have been exploited to support billions of dollars of illicit activity like cyber crime, tax evasion, extortion, ransomware, illicit drugs, and human trafficking.

Following this comment and President Trump's disparaging twitter thread in July of last year, many had assumed that anonymous cryptocurrency transactions would soon face the brunt of a significant crackdown from the U.S. government.

However, Powell’s comments and that of other representatives of the Federal Reserve seem to hint at a potential and rather unexpected policy shake-up. In the context of Department of Justice prosecutions of alleged criminals who have been using Bitcoin in particular, it seems that the US government isn't limited by the pseudononymous nature of cryptocurrency transactions.


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