Federal Reserve Official Expresses Concerns over Unregulated Stablecoins
Federal Reserve official Michael Barr has voiced whole lot of concerns about the dangers associated with stablecoins operating without federal regulation. Although while the Federal Reserve has previously expressed reservations about stablecoins, Barr’s comments indicate a heightened sense of urgency.
Gaps in Stablecoin Regulation Raise Threats
In a statement at a recent fintech event, Barr highlighted the absence of regulation surrounding stablecoins, stating that it might pose substantial dangers to financial stability, monetary policy, and the United States payments system. He emphasized the capacity dangers if non-federally regulated stablecoins become broadly used as a means of payment and store of value.
The Federal Reserve has launched the Novel Activities Supervision Program to address these challenges, aiming to monitor traditional lending institutions’ involvement with digital assets and collaborations with fintech corporations. By focusing on digital assets and fintech collaborations, the Federal Reserve hopes to regulate and manage dangers associated with the digital economy.
Michael Barr’s warnings highlight the need for robust federal oversight in the evolving digital currency landscape. Unregulated stablecoins pose whole lot of threats to financial stability, monetary policy, and the United States payments system, reinforcing the urgency for a more controlled environment for digital currencies.
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