BTC-Newswire

Fed watchdog Michael Barr calls stablecoins risk for economy

Press Releases Crypto News Crypto-News Fed watchdog Michael Barr calls stablecoins risk for economy

Federal Reserve’s Michael Barr highlights the risks of unregulated stablecoins, emphasizing the need for robust federal oversight in the evolving digital currency landscape.

Michael Barr, the Federal Reserve’s leading authority on banking oversight, has voiced robust concerns regarding stablecoins operating outside the oversight of federal regulation.

While Federal Reserve officials have articulated reservations about stablecoins in the past—these being digital currencies anchored to traditional assets such as the U.S. dollar—the latest comments from Barr signify an increased level of urgency.

Gaps in stablecoin regulation pose significant threats

Barr emphasized that such an absence of regulation could result in “substantial risks to financial stability, the effectiveness of monetary policy, and the integrity of the U.S. payments system.” He issued these warnings as part of his prepared statement for a fintech gathering held at the Federal Reserve Bank of Philadelphia last Friday.

“If non-federally regulated stablecoins were to become a widespread means of payment and store of value, they could pose significant risks to financial stability, monetary policy, and the U.S. payments system.”

Michael Barr

Barr also mentioned that the Federal Reserve is still exploring the use case of CBDCs and is yet to make any decisions. The Feds will only proceed with a CBDC with authorization from Congress and explicit support from its executive branch.

The Federal Reserve has initiated a Novel Activities Supervision Program to counter these looming challenges. It is engineered to monitor the extent to which traditional lending institutions engage with digital assets and their collaborations with fintech establishments.

The program aims to establish a more structured approach toward supervision as the regulatory body seeks to gain more control and visibility into this rapidly evolving financial ecosystem. By focusing on these two aspects—digital assets and fintech col

Go to Source to See Full Article
Author: Mohammad Shahidullah

Did you like this?
Tip BTC Newswire with Cryptocurrency