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Apocalypse FED: The Implications of Powell’s Testimony for Stablecoins, CBDCs, and Bitcoin
On the longest day of the year, Fed Chair Jerome Powell delivered a crucial testimony before Congress and the House Financial Services Committee. This testimony holds significant regulatory implications for stablecoins, the dollar, central bank digital currencies (CBDCs), and the world of cryptocurrencies, particularly Bitcoin. As the Federal Reserve prepares to launch FedNow, an inter-bank communication platform, Powell finds himself navigating the complexities of monetary policy, regulation, and capital requirements on the brink of establishing the formal digital dollar system. In this article, we explore the consequences of Powell’s recent statements and their potential impact on the financial landscape.
The Pause in Rate Hikes
Last week, the Powell-led central bank made the unprecedented decision to temporarily halt the rapid and aggressive interest rate increases that have characterized U.S. monetary policy. These rate hikes were implemented to combat the substantial price inflation resulting from the monetary inflation brought about by pandemic-induced stimulus measures. Powell’s decision carries significant implications for the stability of the economy and the effectiveness of future monetary policies.
