Fed admits stablecoins 'beneficial' for financial system but must be regulated by law
Fed Chairman Jerome Powell gave his latest comments on the agency's position on the state of stablecoins today.
In his speech at a Cato Institute conference on the evening of September 8, Fed Chairman Jerome Powell remarked that stablecoins need to be regulated because the operation of this sector is not really regulated. specific, but he also conceded that stablecoins would have a beneficial impact on the financial system if accompanied by legislation.
“We don't want to get in the way of proper innovation. However, stablecoins will need proper regulation and regulation. They must provide consumers with clear, transparent and fully collateralized quality assets that are highly liquid.”
Besides, the Fed Chairman also mentioned the possibility of the appearance of a digital dollar (CBDC) in his 40-minute speech. Jerome Powell said the Fed is re-evaluating whether to issue a CBDC and weighing issues such as privacy.
“We do not intend to proceed with the enactment of a CBDC without explicit support from both the executive branch and Congress, ideally in the form of a specific mandate law.”
The above view is completely consistent with the consideration of US Treasury Secretary Janet Yellen made in December 2021, although the Fed has previously officially published important research reports on CBDC. Recently, Fed Vice Chairman Lael Brainard also stated that in the case of CDBC launch, the US will take another 5 years to achieve this goal.
The latest statement of Chairman Jerome Powell can assess that the Fed is not taking a too negative view of stablecoins if not to confirm that it is setting certain expectations on this area. Notably, in October 2021, the Fed Chairman confirmed that the agency does not intend to ban Bitcoin and cryptocurrencies.
However, right after the information was released, the Bitcoin price right at the time of writing has had an impressive recovery, up more than 6% in the past 24 hours and is trading around 20,500 USD.
However, that was not enough for Bitcoin and the entire crypto market to recover the losses of about 2 weeks ago, also affected by the annual policy speech of the company. Fed at the Jackson Hole Conference.
On September 13, the Fed will release data from the Consumer Price Index (CPI), a measure of the inflation rate of the US economy, from which to decide to raise interest rates on May 21. 09. Therefore, investors should be careful because this period will make the market extremely volatile.
Fox Crypto News summary
Sep 09, 2022