Powell says stablecoins are a ‘form of money’ that central banks should supervise News ▸ US ▸ Stablecoins
Powell says stablecoins are a ‘form of money’ that central banks should supervise
Powell said the "ultimate source of credibility in money is the central bank" and the Fed should have a "robust federal role" in determining the future of any form of money, including stablecoins.
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Updated: Jul. 9, 2023 at 12:29 pm UTC
Federal Reserve. Remixed by CryptoSlate
U.S. Federal Reserve Chair Jerome Powell said the regulator views payment stablecoins as a “form of money” and believes central banks should supervise them.
Powell made the statement in response to Congresswoman Maxine Waters asking whether stablecoin issuers should be licensed and regulated by the Fed during a June 21 hearing.
Waters said that stablecoins are a “new form of currency” that people have been using more and more as their preferred payment method and questioned whether the Fed consider them to fall under its purview.
She added that all banks and non-bank entities dealing with currency or payments should be regulated similarly.
Powell said the “ultimate source of credibility in money is the central bank,” and the Fed should have a “robust federal role” in determining the future of any form of money, including stablecoins.
He added:
“Leaving [the Fed] with a weak role in allowing a lot of private money creation at the state level would be a mistake.”
Powell did not go into details about the Fed’s view on regulating stablecoins, but his last statement implies that the central bank does not view private companies issuing stablecoins favorably.
Congress may push for new rules on a federal level in the coming months to bring stablecoins under the central bank’s supervisory net.
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Assad Jafri
AJ, a passionate journalist since Yemen's 2011 Arab Spring, has honed his skills worldwide for over a decade. Specializing in financial journalism, he now focuses on crypto reporting.
