Federal Reserve chairman announces support for private crypto transactions

Federal Reserve chairman announces support for private crypto transactions
Written by:
Ali Raza
12th February, 11:46
Updated: 11th March, 08:59
  • Jerome Powell, a Federal Reserve chairman, recently spoke of cryptocurrencies to the House of Representatives, sharing some important suggestions.
  • He announced plans to create a digital dollar, stating that such plans existed for a while, but the process will be sped up due to Facebook's Libra.
  • He also talked about anonymous transactions, stating that they should be possible, and thus reversing the policy of the Trump administration.

Federal Reserve chairman, Jerome Powell, recently came out in favor of anonymous cryptocurrencies. Powell made a number of comments to the House of Representatives Committee on Financial Services, and he now seems to be embracing the idea of cryptocurrency efforts.

Powell added that the end goal is to see the arrival of the digital dollar. The day when the US will publish its own cryptocurrency certainly seems to be far away at this point, but Powell says that such plans were actually accelerated due to the announcement of Facebook’s Libra.

Powell did more to just announce plans to create the digital dollar, however. He also made a policy reversal with a statement on privacy and cryptos. His comments revolved about an argument that the government does not have an interest in knowing what everyone is paying for and that this is something that would not be particularly attractive to it, in the context of the United States.

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The future of anonymous crypto transactions

These comments are extremely important, as they represent an official reversal of the negative stance towards anonymous cryptos, as displayed by the Trump administration. Furthermore, Steven Mnuchin, the US Treasury Secretary, recently warned that cryptocurrencies operate in the shadows.

Back in July last year, he said that Bitcoin and other cryptos were exploited to support illegal activities, including tax evasion, cybercrime, human trafficking, illegal drugs, ransomware, and more. The comments were clearly anti-crypto, and many assumed that anonymous crypto transactions are not only off the table for good, but that the US government is planning a major crackdown.

Now, Powell’s new comments indicate that the debate is still on, which is something that many in the crypto industry appreciated. In the end, the allure of cryptos comes from the fact that everyone can manage and use their own funds whenever they want. With that in mind, anonymity is a major part of the crypto industry, and it has been since its creation, over 11 years ago now.

Even so, many others in and out of the US have found the idea of anonymity and autonomous money management hostile to their interests. The Dutch authorities, for example, plan to introduce a new licensing system that would eliminate anonymous transactions, which is only one of many nations that have already attempted to prohibit anonymity.

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