Crypto Weekly: Banning - not banning Crypto Weekly: Banning - not banning Crypto Weekly: Banning - not banning

Crypto Weekly: Banning - not banning

Mads Eberhardt

Cryptocurrency Analyst

Summary:  Federal Reserve chairman Jerome Powell stated that the US has no plans to ban cryptocurrencies, as we saw two weeks ago in China. Visa has initiated a research project to facilitate transactions between numerous stablecoins and central bank digital currencies.

US is taking a lighter stance than China

Two weeks ago, China announced a full-blown crackdown on cryptocurrencies, de facto making them illegal in the country. The crackdown was the most severe carried out on cryptocurrencies to date from the Chinese government, forcing countless crypto service providers including exchanges, brokers, and miners to exit China. Market participants likely expected the severe crackdown as a consequence of the Chinese mining crackdown in May 2021, which may be why the market only took a modest hit after the recent ban.

The US, on the other hand, had a more positive statement on cryptocurrencies last week as Federal Reserve chairman Jerome Powell confirmed that the US has no plans to ban cryptocurrencies. Alongside China, the US counts as the largest market for cryptocurrencies. On top of this, most innovation in crypto particularly within decentralized finance is taken place in the US, virtually meaning the country is crucial for crypto going forward. Jerome Powell stated however that cryptocurrencies need additional regulation, which is expected in one way or another, with particularly the US infrastructure bill to potentially have an immense impact on regulation in the US.

Visa is doubling down on cryptocurrencies and CBDCs

For the past year, Visa has been somewhat explicit about its involvement and plans within cryptocurrencies and central bank digital currencies, known as CBDCs. Visa doubled down on these plans last week by publishing a paper describing a project called “universal payments channel". The intention is to facilitate transactions between numerous stablecoins and central bank digital currencies. In essence, this enables users to pay in a CBDC while being deducted the amount from a stablecoin they hold or vice versa. This is essentially comparable to using a credit or debit card abroad while paying in the fiat currency belonging to one’s home country. The latter is managed by legacy bank systems, while the intention behind the “universal payments channel" is to achieve it decentralized through smart contracts. To accomplish this, Visa has deployed a smart contract to an Ethereum testnet. This project is notably interesting as it will allow CBDCs, cryptocurrencies, and later on decentralized protocols to interact with each other contributing to an increasing synergy across projects. Though, Visa pointed out that the project is still in an early stage, and it highly depends on the cooperativeness of central banks.

Stablecoins and CBDCs in spotlight

Speaking of stablecoins and CBDCs, there is an increasing focus on these matters. First, as the stablecoin supply has grown from $29bn to $126bn year to date, regulators are becoming increasingly aware of this topic. For instance, the Biden administration is allegedly considering regulating stablecoin issuers as banks to decrease the risk of them fueling financial instability. At the same time, between 80 to 100 central banks across the world are exploring CBDCs with US Federal Reserve to launch a CBDC review as early as this week containing public comments. In a fairly positive statement last week, the International Monetary Fund expressed that CBDCs are stable: “CBDCs are designed to be very stable, stable in value, low transaction cost and backed by the central bank for added consumer confidence – very different from bitcoins which fluctuate in value and are more like an investment asset”, adding to IMFs warning of global risks from an unregulated cryptocurrency market.
Source: Saxo Group
Source: Saxo Group


The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (
Full disclaimer (
Full disclaimer (

Saxo Bank (Schweiz) AG
The Circle 38

Contact Saxo

Select region


All trading carries risk. Losses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money. To help you understand the risks involved we have put together a general Risk Warning series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. The KIDs can be accessed within the trading platform. Please note that the full prospectus can be obtained free of charge from Saxo Bank (Switzerland) ltd. or the issuer.

This website can be accessed worldwide however the information on the website is related to Saxo Bank (Switzerland) Ltd. All clients will directly engage with Saxo Bank (Switzerland) Ltd. and all client agreements will be entered into with Saxo Bank (Switzerland) Ltd. and thus governed by Swiss Law.

The content of this website represents marketing material and has not been notified or submitted to any supervisory authority.

If you contact Saxo Bank (Switzerland) Ltd. or visit this website, you acknowledge and agree that any data that you transmit to Saxo Bank (Switzerland) Ltd., either through this website, by telephone or by any other means of communication (e.g. e-mail), may be collected or recorded and transferred to other Saxo Bank Group companies or third parties in Switzerland or abroad and may be stored or otherwise processed by them or Saxo Bank (Switzerland) Ltd. You release Saxo Bank (Switzerland) Ltd. from its obligations under Swiss banking and securities dealer secrecies and, to the extent permitted by law, data protection laws as well as other laws and obligations to protect privacy. Saxo Bank (Switzerland) Ltd. has implemented appropriate technical and organizational measures to protect data from unauthorized processing and disclosure and applies appropriate safeguards to guarantee adequate protection of such data.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.