Federal Reserve Chairman Jerome Powell stated that DeFi, stablecoins and crypto need to be regulated as he described them as ‘private forms of money’.
While virtually participating in discussion on Digital Finance, he sternly declared that the central bank is and will always be the main source of trust behind money.
Not sounding too positive on the crypto front, he added that stablecoins in crypto borrow this trust of Central Banks and they could be subjected to runs. Thus, emphasizing on the need for the regulation.
Powell clearly concluded, “Money creation is the Federal Reserve’s role”. Powell also touched upon decentralized finance and called out the underlying structural issues ‘within the DeFi ecosystem around lack of transparency’.
When addressing the recent crypto collapse, Fed Reserve commented that it’s still a good thing that crypto winter didn’t have any significant ramifications on the banking system or the broader financial stability.
The conference organized by The Banque de France addressed the subject, ‘Opportunities and Challenges of the Tokenization of Finance: Which Role for Central Banks?’ and was held in Paris, France on September 27.
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