Federal Reserve Officials Banned From Owning Cryptocurrencies.

The Federal Reserve says the measure, which comes after a backlash over personal trading by members, is intended to avoid “even the appearance of any conflict of interest.”

Senior Federal Reserve employees will no longer be permitted to trade individual cryptocurrencies as US authorities focus on digital assets.

Amid public pressure to curb trading activities, the new Fed regulations, initially proposed in October, restrict senior officials from acquiring individual stocks or sector funds, as well as owning cryptocurrencies, commodities, and foreign currencies.

Executives need to provide 45 days’ notice before purchasing or selling a security, which cannot be reversed subsequently. The Fed’s 12 regional bank presidents will be compelled to report securities transactions publicly 30 days in advance.

The regulations “aim to support public confidence in the impartiality and integrity of the Committee’s work by guarding against even the appearance of any conflict of interest,” according to a statement issued by the Fed on Friday.

The abdication comes months after Federal Reserve governors Robert Kaplan and Eric Rosengren resigned in September amid a controversy over personal trades.

The final overhaul is more comprehensive than authorities revealed in October. More securities have been prohibited, and Chair Jay Powell now has the authority to limit the transactions of officials’ family, including wives and children.

Meanwhile, the Federal Reserve is continuing to look at the possible applications and hazards of central bank digital currencies (CBDCs). Fed Governor Lael Brainard advised authorities on Friday to take digital asset technology seriously.

Brainard said at the US Monetary Policy Forum in New York:

“Neither the financial system nor we can stand still.” The digital financial ecosystem is rapidly evolving and is becoming increasingly connected with the traditional financial system.”

According to the new laws, authorities will have a year from the date the restrictions take into effect, May 1, to dispose of newly prohibited property. New employees will only have six months to do so.

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Patrick

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