At the U.S. House Financial Services Committee's semi-annual hearing on monetary policy, the Federal Reserve (Fed) Chairman, Jerome Powell, has revealed the agency's stance on the stablecoins. During his testimony, Powell said the Fed, the U.S. central banking system, sees stablecoins as a form of money. The Fed official stated that the ultimate source of credibility in money is the central bank in all advanced economies, and thus, the Fed should regulate and supervise the stablecoins in the U.S. - Powell shared the agency's view on the stablecoins in response to Congresswoman Maxine Waters' question on whether stablecoin issuers should be licensed or regulated and whether the Fed should oversee them.
- The Fed Chairman also pointed out that the digital asset industry appears to be here to stay, though it has seen a sharp decline since last year.
- He added that the Fed was involved in talks with lawmakers from both parties on the upcoming crypto legislation.
- Powell's statements show that the Fed is still a long way from issuing a central bank digital currency (CBDC) or a digital dollar.
- However, the Chairman underlined that allowing the creation of a lot of private money at the state level would be a mistake since it would weaken the Fed's role.
In July, the U.S. House Financial Services Committee will vote on a comprehensive framework for stablecoins, which would be the first crypto legislation in the U.S. if passed, and a separate crypto bill aimed to move the status of digital assets from security to commodity. - A stablecoin is a type of cryptocurrency whose value is pegged to another reference asset, usually a fiat currency.
- Customers generally use these assets to trade with different cryptocurrencies without converting their funds back into fiat currencies.
|
