On June 24, 2025, Federal Reserve Chair Jerome Powell testified before the U.S. Congress, strongly supporting the advancement of cryptocurrency legislation, with a key focus on stablecoin regulation. Powell emphasized the need for a regulatory framework that ensures transparency, consumer protection, and the safety and soundness of financial institutions engaging with crypto activities.
Powell highlighted that stablecoins are digital products with broad appeal, necessitating typical consumer protections and transparency standards, which both the Senate and House are actively working to establish. His endorsement signals growing institutional interest and could accelerate legislative efforts to bring clarity and stability to the crypto market.
Powell also mentioned that banks should be able to conduct crypto activities provided they maintain safety and soundness, suggesting potential increased banking engagement with digital assets. This regulatory clarity could enhance market confidence, fostering greater adoption of stablecoins and broader crypto assets such as Bitcoin (BTC) and Ethereum (ETH).
The endorsement comes amidst ongoing Congressional efforts to implement a stablecoin framework and marks a positive shift toward integrating digital assets within the traditional financial system. Market observers expect such regulatory clarity to increase activity in decentralized finance (DeFi) protocols, liquidity pools, and regulated funding channels. Historically, announcements of clearer crypto regulation often lead initially to increased asset volatility, followed by appreciation once regulatory frameworks are established.
Powell’s remarks underscore the importance of balancing innovation in digital assets with consumer and institutional protections. This development may pave the way for more institutional inflows into compliant crypto assets and a more robust and trustworthy crypto ecosystem.