Michael Barr, a senior official at the Federal Reserve (Fed), stated that stablecoins need to be regulated. The Vice President of Supervision’s statement took place at a conference in Washington DC.
“Stablecoins, as I have said in other observations, need to be regulated. When an asset is pegged to a government-issued currency, it is a form of private money. When this asset is also used as a means of payment and store of value, it borrows the trust of the central bank,” he said.
According to Barr, the Institution has a “strong interest in ensuring that any stablecoin offerings operate within an appropriate federal prudential oversight framework so that they do not threaten financial stability or the integrity of the payments system.” We also provide guidance to the banks we supervise on how they should interact with their supervisors when considering the use of these products.”
It is worth noting that, in June, Jerome Powell, the president of the Federal Reserve, highlighted the need to regulate stablecoins, categorizing them as a “form of money”, in a hearing at the House Financial Services Committee.
Powell’s statements, in addition to influencing conventional markets, brought promising perspectives to the world of cryptocurrencies.
Stablecoins, digital assets whose value tends to be stable because they are linked to some standard, were the focus of discussions with committee members. For Powell, the potential of stablecoins as a means of payment is linked to the reliability that a central bank can provide.
The views and opinions expressed by the author, or anyone mentioned in this article, are for informational purposes only and do not constitute financial, investment or other advice. Investing in or trading cryptocurrencies carries a risk of financial loss.