Fed Chair Endorses Crypto Bills, Tells Congress Banks Can Handle Stablecoins

“It’s a great thing that bills are moving,” Powell said in testimony before the House Financial Services Committee Tuesday. “We need a stablecoin framework.”

He reiterated his support for crypto rules on Wednesday before the Senate Banking Committee.

“The industry is maturing, our understanding of it is improving,” Powell said in response to a question by Sen. Cynthia Lummis (R-WY). “In a sense, it’s becoming much more mainstream.”

Lummis was among a group of four senators, all Republicans, that released a set of principles Tuesday intended to a framework to develop crypto market structure legislation. The framework covers similar ground to the House-passed CLARITY Act, which has been approved by the two committee with jurisdiction but is yet to receive a vote by the full House.

In his Senate testimony, Powell also endorsed the GENIUS Act passed by the Senate last week, which provide a regulatory framework for issuing and trading stablecoins, including allowing banks to provide services to stablecoin holders.

Related: Senate Passes GENIUS Act To Allow Trading In Dollar-Pegged Stablecoins

“It’s appropriate, it’s always been appropriate for banks to choose their customers and to be able to undertake activities as long as they’re safe and sound,” Powell said.

He added the Fed is currently reviewing and withdrawing several of the crypto-related guidance statements issued during the Biden administration.

Powell also voiced support for letting banks provide services to crypto holders in his testimony Tuesday in the House.

“What I do see is a very significant change in the tone, and it really does reflect evolving thinking and the evolving status of the crypto industry,” he said. “Banks are free to provide banking services to the crypto industry and to conduct crypto activities, as long as they do so in a way that is protective of safety and soundness.”

In other issues addressed by Powell in the trips to Capitol Hill this week, he threw cold water on chances for an interest rate cut in July.  “For the time being, we are well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance,” he told the House.

That drew fire from President Trump, who has pressured Powell to cut rates more aggressively. “No inflation, great economy — We should be at least two to three points lower,” Trump wrote in a post on Truth Social.

Powell also reiterated his earlier warning about the president’s tariff policy. “There will be some inflation from tariffs coming,” the Senate panel. “Not yet, but over the course of the coming months.”