Federal Reserve Chairman Calls for Stablecoin Legislation
Federal Reserve Chairman Jerome Powell has urged Congress to develop a legislative framework for stablecoins. Speaking to House Democrats in a closed-door meeting with the House Financial Services Committee, Powell emphasized the need for regulations on stablecoins and signaled the proactive stance of the Federal Reserve.
Powell’s Push for Stablecoin Legislation
Powell’s discussions with lawmakers reflect a critical moment for digital currencies in the United States. He stated that there is a need for a regulatory framework for stablecoins and expressed his support for it. The Federal Reserve is actively working towards robust oversight of stablecoins and Central Bank Digital Currencies (CBDCs).
Importance of Congressional Authorization for CBDCs
Powell also highlighted the importance of explicit authorization from Congress for the adoption of CBDCs. He mentioned that if the US is to have a CBDC, it would require approval from Congress. This emphasizes the need for legislative backing for significant financial innovations like CBDCs.
Legislative Developments and Future Directions
The urgency for stablecoin regulation has led to legislative action, including the approval of two critical bills by the House Financial Services Committee. The Financial Innovation and Technology for the 21st Century Act and the Blockchain Regulatory Certainty Act are significant steps towards creating a structured regulatory environment for crypto firms and blockchain entities.
The Financial Innovation and Technology for the 21st Century Act establishes a comprehensive framework for crypto firms to register with either the Commodity Futures Trading Commission (CFTC) or the Securities and Exchange Commission (SEC). It also introduces a certification process for decentralized projects to encourage innovation while protecting consumers. The Blockchain Regulatory Certainty Act aims to streamline regulations for blockchain entities and define which entities qualify as money transmitters. These legislative efforts aim to clarify the regulatory landscape and promote growth in the blockchain sector.
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