US Fed chair supports stablecoins, with caveats

by: Dynasty GI2022-01-26
The chair of the Federal Reserve – the USA’s central bank – reaffirmed his view that a future digital US dollar must not damage private dollar-based stablecoins.
The comments by Jerome Powell were made soon after he was reconfirmed in the post following a US Senate hearing, and on the same day the Fed published a document with its initial views on a potential central bank-issued digital currency, or CBDC as this kind of cryptos are known.
‘Well regulated, privately issued stablecoins could coexist with a CBDC. (…) It is important for all forms of money to be well-designed and appropriately regulated’, stated Powell. A number of US Congress committees are discussing crypto currencies, their role and regulatory framework in the country.

Regulators in the US have been paying closer attention to stablecoins, cryptos that are expected to be directly supported by other assets, especially fiat currencies like the US dollar or precious metals. For some specialists, stablecoins linked to the US currency, if not properly regulated, could have negative consequences to the country’s financial system.

In November las year, a President’s Working Group set up to look into the crypto market urged Congress to work more quickly on a federal regulatory scheme, especially as there are currently regulatory overlaps between different government agencies and uncertainty over which body is responsible for some crypto-related activities.
"It is good to hear that the current chair of the Fed is aware of the risk that CBDCs can stifle the crypto world if not properly rolled out. There is also a lot of attention being paid to how the US will further regulate the crypto world as their lead is likely to help shape the rules elsewhere in the world."
Noted Eduardo Carvalho, the founder and CEO of Dynasty Global.

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