September 29, 2022

Fed vice chair candidate calls for stablecoin regulation

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Fed vice chairman nominee Michael Barr at a Senate hearing pointed to the importance of creating a regulatory framework for stablecoins. If approved, he will focus on the tasks of banking regulation.

Barr cited the need for risk mitigation for financial stability. In his opinion, cryptocurrencies have “growth potential based on economic benefits”, but carry “some significant risks”. In particular, the possibility of panic among the holders of “stablecoins”.

The main task in the regulation of digital assets, the candidate called the protection of investors, which is the prerogative of other agencies. So Barr reacted to the comment of Senator Elizabeth Warren, who raised the subject of the collapse of Terra.

In addition to stablecoins, the responsibilities of the Fed Vice Chairman also cover the CBDC. For Barr, the issuance of a digital dollar is an issue that requires “scrutiny”.

Earlier, the head of the Fed, Jerome Powell, noted that it is important for the United States not to be the first to issue a CBDC, but to do it with the right approach.

Recall that US President Joe Biden proposed the candidacy of Michael Barr for the role of Fed Vice Chairman in April 2022.

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