Fed Vice Chairman Offers Olive Branch to Crypto

investopedia.com:

The Federal Reserve is working with other regulators to determine «whether and how» crypto can be aligned with safe banking, Vice Chairman Michael Barr said Thursday.

Michael Barr opened his speech at the Peterson Institute for International Economics (PIIE) with familiar warnings to the banking industry.

«Our overall stance is that, at this stage of the development, banks should take a careful and cautious approach to engaging in crypto-asset-related activities and the crypto sector,» he said. “We would likely view it as unsafe and unsound for banks to directly own crypto assets on their balance sheets."

However, the Fed hasn't lost sight of the “potential transformative effect” that blockchain could have on the financial system, Barr said.

Michael Barr's comments echoed statements made by Federal Reserve Chairman Jerome Powell during his testimony to the House Financial Services Committee this week. In The Federal Reserve's semi-annual monetary policy report this week, Powell was probed on the crypto sector.

“Like everyone else we’ve been watching what’s been happening in the crypto space and what we see is quite a lot of turmoil, we see fraud, we see a lack of transparency, we see run risk, we see lots of things like that,” Powell said. «What we’ve been doing is making sure that the regulated financial institutions that we supervise and regulate are careful and taking great care in the ways they engage with the whole crypto space.»