Crypto Sector May See Looser Rules Says Fed Chair Jerome Powell

Federal Reserve Chair Jerome Powell suggested a shift in how regulators treat digital assets, signaling that some restrictions on banks dealing with crypto could ease. Speaking at the Economic Club of Chicago, he acknowledged that the industry has changed and regulators are adjusting.

Good to Know

• Jerome Powell says crypto oversight could ease as the market matures.
• Congress is revisiting stablecoin legislation after earlier efforts stalled.
• Powell warns innovation must not undermine financial stability.

“We took a pretty conservative and other banking regulators took an even more conservative perspective on the guidance and rules we imposed on banks,” Powell said. “I think there’ll be some loosening of that.”

He also reflected on crypto’s troubled past, recalling a stretch defined by fraud and company failures. That period led to closer scrutiny from regulators, including the Fed’s collaboration with Congress on a stablecoin framework. But Powell admitted those earlier efforts didn’t result in new laws: “We were not successful.”

Today, however, the tone is shifting. Powell noted that digital finance is no longer treated as a fringe sector and is becoming part of the broader financial system. “The climate is changing and you’re moving into sort of more mainstreaming of that whole sector,” he said.

Stablecoins remain a key focus in Washington. Powell pointed out that both the Senate and House are again considering legislation that would introduce rules around their use. He said developing a legal structure for stablecoins is necessary and should include clear disclosures and safeguards.

“We need that,” he said, referring to the push for new regulation. He also stressed that any rulebook must strike a balance—encouraging innovation without putting the wider banking system at risk. According to Powell, stablecoins could see wider adoption, but only if they meet consumer protection standards and maintain transparency.