Federal Reserve Chairman Acknowledges Crypto Maturity
Federal Reserve Chairman Jerome Powell has shifted his stance on virtual assets, now recognizing them as part of the regulated financial system. During a Senate Banking Committee hearing on June 25, Powell responded to Senator Cynthia Lummis by stating, "The crypto industry has matured significantly over the past few years and is becoming mainstream." He added that earlier concerns about fraud and structural failures are being reevaluated, with some policies being revised or withdrawn.
This marks a notable change from Powell’s 2021 remarks, where he criticized Bitcoin’s volatility and questioned its utility as a store of value. The shift reflects growing institutional adoption, including Senate bills like the Lummis-Gillibrand framework, which aim to legitimize stablecoins and other crypto assets.
Virtual Assets in Mortgage Approvals: A Landmark Move
The Federal Housing Finance Agency (FHFA) is integrating cryptocurrency holdings into mortgage underwriting standards. FHFA Director William Pultie has directed government-sponsored enterprises Fannie Mae and Freddie Mac to consider applicants’ crypto assets during loan evaluations.
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This policy enables Bitcoin holders to secure mortgages without liquidating their assets. As Matt Cole, CEO of Stribe, noted on X (formerly Twitter): "The U.S. government is effectively underwriting Bitcoin risk by backing these loans."
Market Response: Bitcoin Surges Past $108K
Anticipation of regulatory integration drove Bitcoin to an all-time high of $108,305 on June 26, per CoinMarketCap. While prices later stabilized around $107,612, the rally underscores institutional confidence in crypto’s long-term viability.
Altcoin Reserve Strategies Gain Traction
Following MicroStrategy’s Bitcoin-centric approach, Nasdaq-listed firms are diversifying into altcoins:
| Company | Strategy | Holdings (as of latest report) |
|---|---|---|
| Bit Digital | Ethereum reserves & staking | 24,434 ETH + 417.6 BTC (converting to ETH) |
| Sharplink Gaming | Ethereum reserves | 188,478 ETH (+120 recently acquired) |
| Vivo Power | XRP-focused reserves | $121M raised via private equity |
Bit Digital’s pivot to Ethereum caused a 4% stock dip post-announcement, highlighting market caution toward non-Bitcoin strategies.
FAQs: Crypto’s Mainstream Integration
1. Why did Powell change his stance on crypto?
Growing institutional investment and regulatory clarity (e.g., the Lummis-Gillibrand bill) prompted a reassessment of crypto’s role in finance.
2. How do crypto holdings affect mortgage approvals?
FHFA now allows lenders to count crypto assets as part of an applicant’s financial profile, expanding access to home loans.
3. Which altcoins are corporations favoring?
Ethereum and XRP dominate corporate reserve strategies due to their utility and regulatory progress.
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Conclusion: A New Era for U.S. Crypto Policy
With the Fed’s endorsement and FHFA’s mortgage reforms, virtual assets are transitioning from speculative instruments to regulated financial tools. Corporations leveraging Ethereum and XRP reserves signal broader acceptance beyond Bitcoin, though market reactions remain mixed.
For real-time updates on crypto regulations, track key developments here.