Fed Chairman: The stablecoin regulatory framework is crucial as Congress shows new interest.

The Fed Chair Emphasizes the Importance of Stablecoin Regulatory Framework

Recently, the Chairman of the Federal Reserve, Powell, reiterated the necessity of establishing a regulatory framework for stablecoins during a speech at the Chicago Economic Club. He stated that given the increasing importance of these digital tools, it is crucial to establish an appropriate regulatory system.

Fed Chairman Powell's Latest Speech: Crypto is Becoming Mainstream, Related Regulations Need to Be Loosened

Powell pointed out that both chambers of the U.S. Congress are working again to legislate a framework for stablecoins. Although previous cooperation with Congress on the legal framework for stablecoins had not been successful, he noted that "the situation is changing," and legislators are now showing new interest in formally establishing regulatory guidelines.

The chairman emphasized that such a framework should include consumer protection measures and ensure transparency. He added: "Stablecoins are a digital product that can actually have quite broad appeal."

Regarding banking activities related to cryptocurrencies, Powell acknowledged that U.S. banking regulators took a conservative approach when issuing guidance. However, he stated that some guidance may be relaxed to accommodate responsible innovation, as long as consumer protection and financial safety can be ensured.

"We will try to make adjustments in a way that maintains the safety and stability of the financial system," Powell said. This further explains his earlier statement that the Fed has no intention of preventing banks from serving legitimate cryptocurrency clients.

Earlier this year, Powell made it clear during his testimony in Congress that cryptocurrency activities are already taking place within banks regulated by the Fed under the established regulatory framework. He cited cryptocurrency custody as an example, explaining that if banks and regulators understand the scope of these activities, they can safely offer such services.

Powell also acknowledged that integrating digital assets into the regulatory framework of traditional finance is quite complex, calling for a more comprehensive regulatory structure. In a press conference in February, he stated that although the threshold for banks to participate in cryptocurrency business remains high, the Fed does not intend to cut off banking services for legally operating digital asset companies.

Currently, discussions around stablecoin legislation are ongoing, and at the same time, the use of stablecoins in payments and digital settlements continues to grow. Last year, the transfer amount of stablecoins was close to $14 trillion, surpassing the transaction volume of a well-known payment company.

Although there is currently no federal regulatory framework specifically for stablecoins, several legislative proposals have been put forward in recent sessions of Congress, including the GENIUS Act and the STABLE Act.

The latest stance of the Fed indicates that as stablecoins increasingly integrate into the global financial market, U.S. financial authorities are becoming more willing to engage in the formulation of digital asset policies. This shift in attitude reflects regulators' emphasis on digital financial innovation, as well as efforts to leave room for the development of emerging technologies while protecting consumers and maintaining financial stability.

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GateUser-c802f0e8vip
· 07-22 15:59
You say regulation means regulation? I'm zen.
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OnChain_Detectivevip
· 07-21 10:45
pattern analysis suggests powell finally waking up to stablecoin systemic risks... stay vigilant frens
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GasWastervip
· 07-20 03:46
Here comes the management again.
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LiquidityNinjavip
· 07-19 19:33
Can regulation solve slippage?
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DogeBachelorvip
· 07-19 19:33
Stop pretending, just say it if you want to manage.
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MEV_Whisperervip
· 07-19 19:29
Regulators are scared, let's do more Decentralization.
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SingleForYearsvip
· 07-19 19:11
Regulation, whatever will be will be.
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