The Federal Open Market Committee, which makes decisions on how the Fed should operate, changed the draft to include cryptocurrencies a few months after introducing the initial draft. According to last year’s reports, many senior Federal Reserve officials traded stocks, bonds, and real estate securities in 2020, just before the central bank implemented COVID-19-inspired market-affecting policies. After the disclosures, several officials resigned, but Fed Chair Jerome Powell insisted that the monetary organisation adopt new regulations on the issue. Because of this, the Federal Open Market Committee issued new restrictions in October prohibiting top bank executives from engaging with the assets listed above. The Fed took it a step further in the most recent amendment, which was released on Friday and has already become formal. The majority of the regulations outlined here will go into effect on May 1st.
According to the draft, senior officials would be prohibited from acquiring specific stocks or funds in the following business sectors: they would also be unable to invest in specific bonds, commodities, foreign currencies, other assets, or cryptocurrencies. It should be noted that digital assets were not included in the initial draft.
According to the new guidelines, officials with market roles have one year to get rid of those who aren’t allowed. July 1st is when the new rules come into effect, and senior officials who follow them must give at least 45 days’ notice before buying anything that is allowed. They must also keep the assets for at least a year.
According to the statement, the new regulations “seek to maintain public trust in the impartiality and integrity of the committee’s work by protecting against even the appearance of any conflict of interest.”