Despite Fed Chair Jerome Powell stating that banks can perfectly serve crypto customers, FOX Business journalist Eleanor Terrett claims he is subtly discouraging them.
On Wednesday, Jerome Powell, the Federal Reserve (Fed) chairman, disclosed that U.S. banks can perfectly serve crypto customers. Powell made this known in a statement while speaking at a recent FOMC meeting, where he outlined the Fed’s stance on crypto-related banking.
Fed’s Crypto Focus
In the statement, Powell suggested that the Fed is not primarily concerned about Bitcoin but how banks under its supervision serve customers of the nascent asset. He emphasized that banks can serve crypto customers on the condition that they understand its risks.
Powell indicated that most banks already engage with crypto customers while adhering to the Fed’s risk-management guidelines.
FOX Business Journalist Reacts
In response, FOX Business journalist Eleanor Terrett shared a reaction from a source at a major bank. According to Terrett, the source interpreted Powell’s statement as implying:
“I wouldn’t do it [serve crypto customers], but you [banks] make your own decisions.”
In other words, the source believes Powell’s comment subtly discourages banks from providing financial services to crypto businesses and clients, indicating they can do so at their own risk.
Furthermore, Terrett emphasized that the banker was not convinced by Powell’s statement about banks being able to serve crypto customers. It pointed out that while banks would like to work with crypto clients, regulators have made it increasingly difficult for them to do so.
For further context here — the banker wasn’t buying what Powell was selling about banks being perfectly able to do biz with #crypto customers.
They were basically saying sure we’d like to work with crypto customers but regulators have made it really difficult for us to do so. https://t.co/0YZ9GzYZ7b
— Eleanor Terrett (@EleanorTerrett) January 29, 2025
Powell’s Changing Tone
Meanwhile, Powell’s recent statement reflects a change in tone from his aggressive stance toward crypto. Last month, he referred to Bitcoin as a speculative asset akin to gold. The Fed Chair recognized Bitcoin’s volatility as a significant challenge that limits its ability to compete with the U.S. Dollars.
Despite initially saying he has no plans to ban Bitcoin, he revealed recently that the U.S. apex bank is prohibited from owning the asset under an existing legal framework.
According to him, congressional action is required to change this policy. He made the assertion as part of efforts to distance the Fed from the national Bitcoin reserve initiative as proposed by U.S. President Donald Trump.
Meanwhile, with inflation staying above the 2% target, the Fed decided to pause interest rate cuts to start the year. This move boosted the prices of various cryptocurrencies, including Bitcoin, which soared above $105,000 in the early hours of today.
Notably, Bitcoin is still trading above the $105,000 mark at press time, posting a 3% gain today.
