The U.S. crypto landscape is set to see a major development, and possibly for the good. As per the recently released central bank records, Fed Chairman Jerome Powell met Coinbase CEO, Brian Armstrong, on May 11, 2021.
Powell’s meeting comes in wake of a high surge in crypto trading activities this year. With digital currencies hitting multi-year highs, regulatory bodies and central governments have become active in their scrutiny of the crypto market.
Powell’s meeting happened just days before the U.S. central bank announced that it plans to introduce its discussion paper on Digital Dollar. As per the central bank diary, Powell’s meeting with Armstrong was short and lasted 30 minutes. Coinbase is one of the biggest global crypto exchanges which went for a Nasdaq listing ahead in April 2021.
Post his meeting with Coinbase CEO, the Fed Chairman also met crypto advocate and former CFTC chairman Christopher Giancarlo, a day later.
This is certainly a positive development and must be seen as an attempt to bridge the gap between the traditional world of finance and the emerging crypto space. On May 20, 2021, Powell released a statement noting:
“We are committed at the Federal Reserve to hearing a wide range of voices on this important issue before making any decision on whether and how to move forward with a U.S. CBDC”.
Around the same time, Coinbase CEO Brian Armstrong also announced that the meeting was positive. In a series of tweets, Armstrong wrote: “The politicians and agency heads I met with were all thoughtful and committed individuals, and I was happy to have our teams connected, and new friendships formed”.
What To Expect Ahead?
Powell knows well about the accelerated development of the Digital Yuan by the Chinese central bank PBoC. Thus, Fed Chairman will be working to maintain the stronghold of USD in the international market. Powell said that the Fed will play “a leading role” in setting up international standards for CBDC.
Amid the economic downturn, Latin American nations like El Salvador have made Bitcoin legal tender in the country along with the USD. This puts Bitcoin in direct competition with the USD. As a result, the Fed might likely accelerate the Digital Dollar development ahead.
The meeting suggests that financial regulators are willing to work with crypto players to establish clear rules for the industry.
Amid the China crackdown on Bitcoin miners, a lot of them have moved base to the U.S. This is a good opportunity for America to consolidate its power of driving the Bitcoin hashrate.
America could possibly work out a crypto + CBDC mechanism that counter China’s growing dominance in the global economy.
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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.