Fed's Barr Calls for Stablecoin Regulation (Again)
The U.S. Federal Reserve's Vice Chair for Supervision Michael S. Barr reiterated his calls for greater regulation of stablecoins.
By: Camila Russo •Crypto News
The U.S. Federal Reserve's Vice Chair for Supervision Michael S. Barr reiterated his calls for greater regulation of stablecoins in his opening remarks at the Economics of Payments XII conference Thursday.
Barr said it's hard to speak about payments innovation without mentioning new technologies, such as stablecoins.
"We must carefully weigh the benefits and risks of different uses of these new technologies," Barr said. "Stablecoins, as I have said in other remarks, need to be regulated. When an asset is pegged to a government-issued currency, it is a form of private money."
These digital currencies "borrow the trust of the central bank" due to their pegging to a government-issued currency, and thus when used as payment or store of value, it is important these offerings operate within an appropriate oversight framework, he argued.
He added that the Federal Reserve has a "strong interest" in ensuring that stablecoins "do not threaten financial stability or payments system integrity." He reiterated the Federal Reserve's commitment to providing guidance to banks on handling these products.
Barr highlighted the importance of the Federal Reserve in the payments system. He remarked on innovations such as the FedNow Service, launched in July, which was developed in response to a growing demand for instant payments.
Barr also said the Fed is conducting research on central bank digital currencies (CBDCs). He noted, however, that the Fed has made no decision to issue a CBDC and would only do so with support from the executive branch and legislation from Congress.
Also on the agenda were international collaboration in payments systems and efforts to lower the cost of payment services for financial inclusion, which a crypto enthus