The cryptocurrency market is presently valued at about US$290 billion. Still, according to the U.S. Federal Reserve (Fed) Chairman Jerome Powell, it is not big enough to pose a threat to financial stability. Powell presented his thoughts on cryptos during testimony before the House Financial Services Committee.

The view that cryptos still don't pose a threat has been echoed by other institutions as well in the past. Recently, the Financial Stability Board (FSB) delivered a report to G20 Finance Ministers and Central Bank Governors stating that cryptocurrencies do not pose a risk to global financial stability. Hong Kong’s watchdog FSTB (Financial Services and Treasury Bureau) also shared the similar view a couple of months back.

The Fed chairman also added that the cryptocurrencies are out of the regulatory control of the Fed and that it isn’t seeking to “provide oversight.” It is, however, to be noted that Federal agencies like the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) already supervise many crypto related businesses and SEC has also down a number of illegal operators in the sector.

Powell also raised concerns regarding cryptocurrencies that they have no intrinsic value and are only good if you are trying to hide or launder money. “It’s not really a currency, it doesn’t really have any intrinsic value… Mainly I have concerns. If you think about what currencies do, they’re supposed to be a means of payment and a store of value basically and cryptocurrencies are not used very much in payment… and in terms of the store of value, if you look at the volatility (or lack thereof), it’s just not there.”

He also mentioned about risks and protection issues as well with cryptos. "I think there are significant investor risks. Investors, relatively unsophisticated investors, see the asset going up in price and they think ‘this is great I’ll buy this.’ In fact, there is no promise behind that…. So I think there are investor and consumer protection issues as well.”

Last year in November, however, Powell had commented that "in the long, long run, cryptocurrencies and things of that nature could matter," adding that blockchain "may have significant applications in the wholesale payments part of the economy."