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Stablecoins Are a Form of Money, Fed Chair Admits in House Testimony

Press Releases Crypto News BeInCrypto Stablecoins Are a Form of Money, Fed Chair Admits in House Testimony

Federal Reserve Chair Jerome Powell has explicitly acknowledged that stablecoins are a form of money. He made the bold admission in the course of comments delivered Wednesday during the US House Financial Services Committee’s semiannual meeting on monetary policy.

Powell’s remarks took many by surprise. Especially given the harsh stance of his colleagues in the government toward cryptocurrency, and stablecoins in particular. The Securities and Exchange Commission (SEC) wages an escalating war against virtually all cryptocurrencies. Classifying them as securities that should rightfullly fall under SEC control.

Stablecoins Are Real Money

“We see stablecoins as a form of money,” Powell said during his Wednesday remarks. The admission quickly provoked surprised reactions from crypto and financial commentators.

In a regulatory landscape where current and former SEC personnel routinely attack crypto as a fraud and a Ponzi scheme, Powell sounded an iconoclastic note. He contradicted recent remarks from SEC head Gary Gensler and others. Last month, former SEC official John Reed Stark called the stablecoin Tether a “mammoth house of cards.”

Stark, a former chief of the SEC’s division of Internet Enforcement, said he believes stablecoin could be “the next domino to fall.”

For his part, Powell was quick to qualify his admission. He said bluntly that the crypto market will never usurp the role of his organization, the Fed, in setting interest rates and other fiscal policy. He offset his admission about stablecoin by saying the Fed will always be “the main source of trust behind money.”

“Stablecoins essentially borrow that trust from the underlying issuer, and in many cases, these are dollar stablecoins, so they’re really borrowing that trust,” he said.

He called stablecoins private forms of currency. Powell added that they may experience runs if their re

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Author: Michael Washburn

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