A few months after submitting the first draft aiming to ban Fed officials from owning certain assets, the policymaking Federal Open Market Committee updated the document to include cryptocurrencies.
Reports emerged last year that numerous high-level Fed employees traded stocks, bonds and real estate securities in 2020, shortly before the central bank employed specific COVID-19-driven policies that hit the market. Some lawmakers resigned after the revelations, but Fed Chairman Jerome Powell insisted the Fed must enforce new rules on the matter. As such, the Federal Open Market Committee proposed rules in October that would bar top bank officials from committing to the aforementioned assets. The Fed went a step further in the latest amendment that came out on Friday, which has now become official. Most of the rules below will go into effect as of May 1. It says top officials will be barred from buying individual stocks or funds that track business sectors. They will also not be able to invest in individual bonds, commodities, currencies, other securities and cryptocurrencies. It is worth noting that digital assets were not mentioned in the first draft. The new regulation also implies that officials who hold positions in the market have one year to dispose of the prohibited ones. Beginning July 1, senior officials covered by the new rules must give 45 days’ notice before making any permitted purchases and must hold those assets for at least a year. The new rules “are intended to support public confidence in the impartiality and integrity of the Committee’s work by avoiding even the appearance of any conflict of interest,” the statement read.
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