Bitcoin
$113,378’s price remains stuck at $113,400, partly attributed to the Federal Open Market Committee (FOMC) minutes, which have restrained investors’ risk appetite. Interestingly, the Federal Reserve has made supportive statements regarding cryptocurrencies, echoing sentiments shared previously. Two officials advocating for interest rate cuts have also shown support for cryptocurrencies, which some interpret as strategic maneuvers to appease President Trump.
Fed’s Advocacy for Cryptocurrencies
At a recent event, Fed member Christopher Waller highlighted the transformation occurring in the payments sector, expressing support for cryptocurrencies. Previously, Bowman delivered a speech titled “Embracing Innovation,” addressing the revolutionary shift in tokenization, cryptoregulations, and payment systems. Bowman expressed satisfaction, stating that the present-day transformation was beyond what she ever imagined possible.
Bowman referred to the evolving payment ecosystem as a “technology-driven revolution,” fueled by advancements in computing power, data processing, and distributed networks. This evolution encompasses innovations like instant payments available 24/7, user-friendly digital wallets, mobile payment apps, and stablecoins alongside other digital assets.
Amid the excitement about these new technologies, Bowman acknowledged both the overblown expectations and skepticism they sometimes attract. Yet, she emphasized that the evolution of payment systems tells a longstanding story of technological advancement.
Waller dedicated a section to stablecoins, emphasizing their benefits. As the stablecoin market matures, corporations recognize features like 24/7 accessibility, rapid transferability, and ease of circulation that could be appealing for broader use cases. The market’s growth, especially in inflationary regions or where access to cash or banking is limited, underscores stablecoins’ potential in maintaining the international role of the US dollar.
Back in February, Waller acknowledged the maturing stablecoin market, highlighting the need for regulatory clarity and reduced fragmentation in the US. The introduction of the GENIUS Act marked the first significant legislation related to crypto assets, a major stride for payment stablecoins.
Fed Operation 2.0
There’s speculation that Trump’s rapid pace could lead to headlines about a “Fed Operation 2.0” once he leaves office. Despite attempts to influence policy by threatening legal action against Powell, Trump hasn’t yet achieved lower interest rates. Following Kugler’s resignation, his replacement, Miran, has increased the likelihood of a rate cut.
However, there aren’t enough votes to proceed. Another Fed resignation might be necessary for Trump to install a favorable choice. Reflecting on this, Pulte from the US Federal Housing Finance Agency (FHFA) remarked on an inquiry into Fed Chairman Cook’s properties in Massachusetts.
Like Powell, Cook is also accused of misconduct, potentially facing forced resignation. It remains to be seen how these developments pan out over time.
