Call for Regulatory Framework for Stablecoins Made by Jerome Powell
Federal Reserve Chairman Jerome Powell recently discussed the importance of creating a legislative framework for stablecoins during a meeting with House Democrats. Powell expressed his support for establishing such a framework and expressed his satisfaction with the progress made so far.
The Federal Reserve’s engagement with lawmakers highlights its commitment to implementing strong oversight measures for stablecoin and Central Bank Digital Currency (CBDC) regulations. Powell emphasized that if a CBDC is to be introduced, it is crucial for Congress to authorize it.
This discussion is not new, as the topic was previously addressed during a hearing on monetary policy in June 2023. Powell reiterated the Federal Reserve’s position on payment stablecoins during the hearing, stressing the need for central bank credibility within monetary systems.
In July 2023, the House Financial Services Committee approved two bills that are relevant to this matter. The first bill, called the Financial Innovation and Technology for the 21st Century Act, established regulations for cryptocurrency firms to register with either the Commodity Futures Trading Commission (CFTC) or the Securities and Exchange Commission (SEC). It also outlined a certification process for decentralized projects.
The second bill, known as the bipartisan Blockchain Regulatory Certainty Act, aimed to streamline regulations for blockchain entities and defined the criteria for qualifying as money transmitters.
It is clear that the regulation of stablecoins and the development of a CBDC require careful consideration and a robust legislative framework. The Federal Reserve, along with the House Financial Services Committee, is actively working towards creating an effective system that ensures the stability and credibility of these digital assets.
