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Coinpaprika 2025-02-12 09:13:50

Fed Chair Powell Holds Rates, Supports Stablecoin Rules, Opposes Debanking

Federal Reserve Chairman Jerome Powell told the Senate Banking Committee that he sees no urgency in cutting interest rates, despite pressure from President Trump over inflation concerns. Powell also voiced support for stablecoin regulation while opposing anti-crypto debanking efforts, signaling a more favorable stance toward digital assets. Powell reaffirmed the Fed’s cautious approach, saying aggressive interest rate cuts are unnecessary. Last year, a 50 basis-point rate cut boosted the crypto market, but Powell has since slowed the pace. While some investors hope for larger cuts to encourage capital inflows, drastic reductions could create uncertainty and push investors toward safer assets. His decision to maintain the status quo may lead institutional investors to wait for clearer policy signals before making significant moves into crypto. Reflecting this cautious sentiment, Bitcoin ETFs saw their first weekly net outflow of 2025. Beyond interest rates, Powell addressed the need for clear regulations around stablecoins. He emphasized their potential for both consumers and businesses but stressed the importance of a strong regulatory framework to ensure financial stability and consumer protection. The European Union recently adopted stablecoin regulations, increasing pressure on U.S. lawmakers to do the same. Powell fully supports these efforts, stating that stablecoins should develop within a regulated environment that safeguards users. Additionally, Powell took a stand against ongoing efforts to limit crypto banking access. He acknowledged growing concerns about "debanking" and pledged to examine the issue more closely. Congress is currently investigating Operation Choke Point 2.0, and the FDIC has released a large collection of documents related to the matter. Powell appears convinced by the findings and has committed to using his influence at the Fed to prevent further restrictions on crypto-related banking services. Overall, Powell’s statements suggest a more measured approach to monetary policy and a willingness to support clearer crypto regulations. His stance could shape the financial landscape in the coming months, influencing both investor sentiment and the broader regulatory environment for digital assets.

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