U.S. Federal Reserve Chair Jerome Powell has revised calls for a legal framework surrounding stablecoins, digital tokens that are pegged to the dollar and are being used in more international transactions, as the cryptocurrency sector gets closer to becoming a part of the financial mainstream.
Although Powell views regulations as essential, his more general remarks also sparked worries about inflation and economic expansion, which rocked markets and put a stop to Bitcoin’s most recent surge.
Speaking at the panel at the Chicago Economic Club, telecast by Bloomberg Television, Powell stated that stablecoins had become a digital product “that could actually have fairly wide appeal “ in spite of the cryptocurrency industry’s previous issues of failures and frauds.
After years of hesitation in Washington, with earlier efforts to regulate stablecoin falling short. Powell thinks the momentum is changing now.
Powell stated that the Fed “worked with congress to try to get a […] legal framework for stablecoins, which would have been a nice place to start” during the challenging years of cryptocurrency, which came to a peak in 2022 and 2023 with a number of high-profile business bankruptcies.
“Congress is again looking […] at a legal framework for stablecoins because I think the climate is changing and you’re moving into more mainstreaming of that whole sector,” said Powell.
Additionally, he said, “Depending on what’s in it, that’s a good idea. We need that. There isn’t one now.”
Powell has already highlighted the necessity of stablecoin legislation. The Fed Chief told the House Financial services Committee in June 2023 that stablecoins are a “ form of money” that need robust federal regulation
Also read : Acting SEC Chair Mark Uyeda Calls for New Crypto Regulations
