[Bitcoin Now] Rebounds to 52 Million Won Range... Powell Says Stablecoin and CBDC Can Coexist

Powell "CBDC Report to Be Released Within Weeks"

[Image source=Yonhap News]

[Asia Economy Reporter Gong Byung-sun] The representative cryptocurrency Bitcoin slightly rebounded to the 52 million KRW range. Jerome Powell, Chairman of the U.S. Federal Reserve (Fed), expressed a view that cryptocurrencies and Central Bank Digital Currencies (CBDCs) can coexist, which appears to have had a positive impact on the cryptocurrency market.

According to the domestic cryptocurrency exchange Upbit, as of 2:17 PM on the 12th, Bitcoin recorded 52.02 million KRW, down 0.55% compared to the previous day. It rebounded to 52.56 million KRW at 9:16 AM on the same day but has since stalled. On the 10th, Bitcoin had fallen to 48.89 million KRW but is showing signs of somewhat recovering from the slump.

Powell’s remarks acted as a positive factor. According to Bloomberg, a U.S. economic media outlet, on the 11th (local time), during a U.S. Senate Banking Committee hearing, Powell responded to a question from Republican Senator Pat Toomey asking, “If stablecoins are under strict supervision by regulators, is there a problem with coexisting with CBDCs?” by saying, “I don’t think there is a problem.” Stablecoins are cryptocurrencies linked to fiat currencies such as the dollar and are known to have less volatility than traditional cryptocurrencies.

Powell also stated that the Fed plans to release its opinion on CBDCs in the near future. He said, “The Fed plans to publish a report related to CBDCs within weeks.” However, he did not specifically mention whether the Fed will issue a CBDC.

Until now, the U.S. government had a negative stance on stablecoins. In November last year, the Financial Markets Working Group under the Biden administration released a report on stablecoins. The report suggested that stablecoins should be regulated similarly to banks and that legislative action by Congress is necessary. In September last year, the U.S. Treasury Department discussed whether to conduct an official review on whether stablecoins threaten the stability of the regulated financial system.

Meanwhile, the remaining Fed schedule is expected to impact the cryptocurrency market. On the 12th, the Fed is scheduled to release the Beige Book, an economic outlook report. The Beige Book is the most referenced report when the Fed decides short-term interest rates. On January 25-26, the Fed will hold the regular Federal Open Market Committee (FOMC) meeting to discuss monetary policy.