- The Federal Reserve recently approved rules that prevent senior officials from trading in cryptocurrencies and other assets.
- The prohibition also applies to stocks and bonds; It affects officials at the Federal Reserve and their relatives.
- Cryptocurrency was not discussed last October when the possibility of a trade ban was first suggested.
The US Federal Reserve has approved measures that prohibit senior officials from trading in cryptocurrencies and other assets. As Kriptokoin.com, we have compiled the details for you, let’s examine the subject together…
FED officials will not be able to trade cryptocurrencies!
The new rule prohibits senior Federal Reserve officials from trading cryptocurrencies, stocks and bonds. It also prohibits trading in commodities, foreign exchange, sector index funds, derivatives and agency securities, and also prohibits leveraged short selling. Although the ban was discussed more generally last October, the cryptocurrency was not mentioned during these discussions.
The policy was officially adopted on February 18, but will not take effect until May 1, 2022. Authorities must dispose of the assets within twelve months from the effective date. In some cases, authorities will have six months to dispose of their assets. Some affected officials will also need to announce their investments sooner. Federal Reserve officials, Boston or St. Regional bank presidents, staff officers, bond desk managers and other employees, such as those at the St. Louis Fed., will be subject to the new restrictions.
What is the reason for the officially adopted crypto ban?
The ban will also include the Federal Open Market Committee, a top group that defines financial policy and sets interest rates. In addition, relatives of the authorities, such as spouses and children under the age of 18, will be prohibited from trading crypto and other assets. More Federal Reserve personnel are expected to be placed under an umbrella ban in the future. The new rule was created to increase public confidence in the Federal Reserve. According to the text of the announcement, the trade ban means “supporting the public’s confidence in the impartiality and integrity of the Committee’s work, even by protecting against any appearance of conflict of interest.”
This policy move comes after a debate on insider trading within the Federal Reserve, which began in 2020, came under wider media scrutiny by Dallas Fed President Robert Kaplan and Boston Fed President Eric Rosengren in 2021. This period has also seen extreme market uncertainty due to the novel coronavirus, which has caused the Federal Reserve to resort to extreme policies such as low interest rates and large bond purchases.
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