Jerome Powell, chairman of the Federal Reserve, told a Senate committee Wednesday that officials at the US central bank are watching the crypto market closely amid a period of heightened volatility.
Powell's comments came in response to a question from Senator Kyrsten Sinema (D-AZ) about the impact of recent crypto market volatility on the Fed's operations, including any macroeconomic implications.
Powell said the Fed is watching the ongoing situation "very carefully" but added that the US central bank is "not really seeing significant macroeconomic implications, so far."
"But I think the principle implication is really what we've been saying and what others have been saying for some time, which is that in this very innovative, new space, really there is a need for a better regulatory framework," Powell went on to say, adding:
"The same activity should have the same regulation no matter where it appears, and that isn't the case right now because a lot of the digital finance products, in some ways, are quite similar to products that have existed in the banking system or the capital markets but they're just not regulated the same way. So we need to do that."
Bitcoin's price, and prices for other digital assets, has gyrated in recent days, having fallen below $18,000 during weekend trading. The price of bitcoin is about $20,800 at press time, according to data from Coinbase.