The head of the U.S. Federal Reserve has called for new rules to govern cryptocurrencies, including setting up a self-regulatory body to oversee the industry. In an interview with CNBC, Chair Jerome Powell said that crypto traders should be required to register with the government, just as equities traders are.
He said that crypto exchanges should also be regulated, just as traditional exchanges are. The comments come as the U.S. Securities and Exchange Commission prepares to approve a plan that would allow the first cryptocurrency exchange traded fund.
In remarks at the International Monetary Fund’s annual meeting in Bali, Indonesia, Powell said the Fed is monitoring cryptocurrencies closely and has brought in experts to provide advice. But he said the Fed needs clearer guidelines before it can determine how to best regulate them.
Powell said the Fed is also concerned about potential market manipulation and fraud, particularly in the context of cryptocurrencies and initial coin offerings, or ICOs, which have raised billions in capital without offering much in the way of product or service.
Mr. Powell was speaking at the central bank’s annual symposium in Jackson Hole, Wyoming, where he was questioned by CNBC interviewer Becky Quick. He said that the current regulatory framework is not working, and that cryptocurrencies need to be subject to new rules and regulations to keep them in check. Today, he said, cryptocurrencies are largely anonymous, decentralized and beyond the reach of most regulators.