Powell is testifying before the House Financial Services Committee on the state of the economy.
Fed Chair Pro Tempore Jerome Powell said Russia’s invasion of Ukraine could emphasize a need for cryptocurrency regulation to prevent sanctioned individuals from using cryptocurrency to evade sanctions.
“[The Ukraine-Russia conflict] underscored the need for Congressional action on digital finance including cryptocurrencies,” Powell said. “We have this burgeoning industry which has many parts to it, and there isn’t in place the kind of regulatory framework that needs to be there.”
The Fed Chair was responding to a question about whether Russia could use cryptocurrencies to bypass sanctions. The U.S., EU and other nations have imposed financial sanctions against Russia in an effort to have it back down from its invasion of Ukraine. Earlier on Wednesday, the European Union cut seven of Russia’s largest banks off from the SWIFT interbank messaging system.