The House Financial Services Committee Expresses Concerns about Recent Fed Letters
The House Financial Services Committee has sent a letter to Federal Reserve Chair Jerome Powell expressing concerns about two recent Fed supervision and regulation letters related to digital assets. The committee is worried that these letters may hinder the progress made by Congress in establishing a regulatory framework for payment stablecoins.
Key Points:
- The first letter establishes a program to enhance oversight of emerging fintech activities in banking, including crypto-asset custody, crypto-collateralized lending, crypto-asset trading, and stablecoin issuance or distribution.
- The second letter outlines a supervisory approval process for state member banks engaging in activities involving dollar-backed stablecoins, requiring them to demonstrate adequate risk management capabilities.
- The Committee believes that if these letters remain in place, financial institutions may be deterred from participating in the digital asset ecosystem.
- The Committee states that the letters were not issued in accordance with the process set forth by the Administrative Procedure Act.
- The Committee argues that the Federal Reserve’s actions represent an effort to set policy without being held accountable, which is the responsibility of Congress.
Hot Take:
The House Financial Services Committee’s letter to Federal Reserve Chair Jerome Powell highlights the growing tension between regulators and lawmakers in regard to digital assets. The committee is concerned that the Fed’s recent letters may hinder the development of a regulatory framework for payment stablecoins. This highlights the need for clear and coordinated efforts between regulatory bodies and Congress to ensure the growth and stability of the digital asset ecosystem.
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