Powell: Stablecoins are a ‘form of money’ the Fed needs to regulate

The central bank head appeared before lawmakers Wednesday to defend his monetary policy

article-image

Federal Reserve Chair Jerome Powell | Federal Reserve (CC license)

share

Federal Reserve Chair Jerome Powell appeared before the House Financial Services Committee Wednesday to discuss the state of monetary policy — fielding crypto-related questions in the process. 

Committee members who asked Powell about digital assets focused their attention on stablecoins and central bank digital currencies, or CBDCs

“We do see payment stablecoins as a form of money, and in all advanced economies, the ultimate source of credibility in money is the central bank,” Powell said when asked about how the Fed is thinking about privately issued stablecoins. 

“We believe it would be appropriate to have quite a robust federal role” in stablecoin regulation, he added. 

Rep. Zack Nunn, R-Iowa, raised concerns regarding user privacy protection if the US were to move forward with a CBDC. Nunn was particularly concerned about the Fed having uninhibited access to American spending habits.  

“We would not support…accounts at the Federal Reserve by individuals,” Powell said. “If we were to, and we’re a long way from this, support at some point in the future a CBDC, it would be one that we’re intermediating through the banking system and not directly at the Fed.”

Wednesday’s hearing was the first of Powell’s two-day Capitol Hill tour. On Thursday, the central bank head will appear before the Senate Banking Committee. The hearings are part of Powell’s twice-annual policy report, which became federally-mandated at the start of the Covid-induced economic downturn. 

Investors took Powell’s remarks Wednesday as hawkish. The S&P 500 and Nasdaq Composite indexes closed the trading session 0.5% and 1.2% lower, respectively.  

Futures markets were pricing in a 72% likelihood of a 25 basis point increase in July, according to data from CME Group. An increase would come after the Fed opted to hold rates at around 5% at their last policy-setting meeting earlier this month

Crypto fared better. Bitcoin (BTC) and ether (ETH) were up about 6% and 5%, respectively, by publication. Analysts have largely attributed the rally to apparent indicators of institutional interest.

“Greater regulatory clarity in the crypto ecosystem will continue to catalyze a wave of mainstream bitcoin adoption,” Alex Adelman, CEO and co-founder of bitcoin rewards app Lolli, said in a statement on Wednesday. 

“We will also continue to see bitcoin’s market dominance rise as institutional and retail investors favor bitcoin as a way to secure their capital in a fundamentally secure, sound, and independent store of value.”


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 24 - 26, 2026

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked by Template.png

Research

The march toward an interoperable and onchain-by-default internet depends on reliable messaging and value transfer across heterogeneous domains. Crosschain protocols now process >$1.3T in combined annual transfer volume and secure tens of millions of user interactions, yet no single design dominates.

article-image

The goal, per Santiago Santos, is to make crypto a relatable piece of tech for people who may not even understand it

article-image

Stripe stablecoin unit aims to operate under a federal charter enabling regulated stablecoin issuance and custody services

by Blockworks /
article-image

Will TradFi make crypto better or create more problems than it solves?

article-image

Subtle decisions by risk curators saved Aave from significant turmoil

article-image

The new Rootstock Institutional unit aims to connect professional investors to Bitcoin-native yield and liquidity strategies anchored in BTC’s security layer

by Blockworks /
article-image

DOJ files record civil forfeiture against more than 127,000 BTC linked to scam activity

by Blockworks /