The Chairman of the Federal Reserve, Jerome Powell believes that digital innovation won't go away, so there is a need for new regulations.
Related: Jerome Powel Says Fed Has No Plans to Ban Crypto
In a virtual summit held by the Bank of International Settlements, Powel said that Distributed Ledger Technology and decentralized finance have the potential to enhance the efficiency of payments and help to enable a more competitive financial market.
Talking about Central Bank Digital Currencies, Powell said that the Fed hasn't decided yet whether to pursue a CBDC yet. However, the institution is collaborating with other Central Banks on CBDCs exploring ways to address frictions in international payments and come to some principles accepted by all.
Jerome Powell also said that the Fed may partner with other CBs to develop crypto, stablecoins, and financial innovation regulations. The Fed is looking at filling regulatory gaps around digital assets and how they will operate in the banking system.
The Fed chair mentioned risks related to the crypto industry once, expressing financial stability concerns for some products.