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Powell’s Speech: A Statement Which Will Affect Crypto Sector

Manoj Nair



Interest Rate

The most important speech by Jerome Powell at the Jackson Hole conference has revealed several policy statements regarding Crypto Sector. Nick Anthony from Cato Institute, feels that the Minneapolis Fed President Neel Kashkari’s statement regarding CBDC can be dubbed as the statement of the year for Crypto Sector.

Powell’s speech can be described as balanced and it reined in the bullish run of the Crypto Sector and also curtailed excessive consumer enthusiasm. It also laid out the roadmap for the 2023-year economic viewpoint. Kashkari’s comments on Central Bank Digital Currency stood out as a something which will define the Crypto Sector future.

Central Banker Turns On CBDC

CBDC are issued by the Central Banks and can also be labelled as Digital Fiat Currencies. On one hand there is decentralized finance Bitcoin and Ethereum which are based on Blockchain technology, the CBDC cannot be called DeFi because it will be controlled by the Central Banks. The monetary policies of the Fed will have a direct bearing on the CBDC.

Bitcoin buff and author of Undressing Bitcoin, Layah Heilpern feels that CBDC will help censor crypto assets and her views are shared by Kashkari, a central banker himself about the Central Bank Digital Currencies.

Kashkari has underlined one important drawback of CBDC and it is its inoperability across the borders. Moreover, CBDC is not a solution for the Consumer but to the state and it does not offer the advantages of Bitcoin or other cryptocurrencies.

Founder of Erik Voorhees, tore into UN recommendation of banning crypto and push CBDC as an alternative. In any case he also believes that CBDC has been offered by the Central Banks to cripple crypto and does not offer any alternative for digital assets to the consumers. Also CBDC will provide a tool for the State to monitor the financial activities of the public.

Federal Reserve chair Jerome Powell feels that the option of bringing out a digital currency must be explored by the nation. He added that he will offer a recommendation to congress on how to go about building a CBDC.

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