Federal Reserve -chairman Jerome Powell repeated the need for a regulatory framework for Stablecoins and indicated that the FED does not intend to limit the interaction between the banking sector with the crypto industry.
Powell said on April 16 in the Economic Club of Chicago and said that both Chambers of the Congress revise the efforts to make a stablecoin framework, which he described as necessary in view of the growing relevance of these digital instruments.
Powell noted that earlier efforts to collaborate with the congress on a legal structure for Stablecoins were unsuccessful. Nevertheless, he noted that ‘the climate is changing’, where legislators now show renewed interest in formalizing regulations.
He emphasized that such a framework must include consumer protection and ensures transparency and added that “stablecoins are a digital product that could actually have a fairly broad attraction.”
Loss
Powell has also tackled the position of the Federal Reserve on crypto-related banking activity. He acknowledged that American banking rulers, including the FED, had chosen a conservative approach to issuing guidelines on how banks should manage exposure to digital assets.
However, he stated that part of this guidance can be relaxed to be responsible, provided that consumer protection and financial safety remain intact.
He said:
“We will try to do it in a way that retains safety and reliability.”
The comments build on Powell’s earlier statements that the FED does not try to prevent banks from serving legal crypto clients.
In testimony of the congress earlier this year, Powell clarified that crypto activities are already in place by FED-regulated banks among established supervisory frameworks.
He mentioned Crypto Guardianship as an example of such services that banks can safely perform if she and the supervisors understand the scope of the activities.
Powell also recognized the regulatory complexity surrounding the integration of digital assets in traditional finances, which called for a more extensive supervisory structure.
Crypto and Banking
During a press conference after the meeting of the Federal Open Market Committee (FOMC) in February, Powell said that although the bar remains high for banks to make contact with Crypto, the Fed does not intend to reduce access to banking For legal operational digital activa companies.
The continuous discussion about Stablecoin legislation comes in the midst of continuous growth in their use for payments and digital regulations. Last year Stablecoins registered nearly $ 14 trillion in transfer volume, which exceeds the visa.
Powell’s statement positions the Federal Reserve as support for conference efforts to create formal rules for stablecoins, provided that such legislation is a innovation balance with risk reduction.
There is no federal regime specific for Stablecoins, although several legislative proposals are spread in recent congress sessions. The most striking are the genius law and the stable law, proposed by the House of Representatives and the Congress, respectively.
The newest function of the FED indicates that the growing preparation among American financial authorities to participate in the digital activity policy, especially because Stablecoins increasingly integrate into global financial markets.