Fed Chief Powell Weighs In: The Stablecoin Scoop

• Fed Chairman Jerome Powell discussed stablecoins during a speech at the US House of Representatives.
• Powell stated that they view stablecoins as a currency and that it would be a mistake to leave the Fed with a weak role in stablecoins.
• The House Financial Services Committee published the third draft of a stablecoin bill in June, which aimed to combine the views of both sides of the House.

In a recent speech at the US House of Representatives, Federal Reserve Chairman Jerome Powell touched upon the topic of stablecoins, stating that they are considered a form of currency. Powell emphasized that it would be an error to leave the Fed with a weak role in stablecoins, and also discussed the importance of having banks of different sizes in the system.

Fed Chairman Powell’s Statements Garner Attention

#FED Chairman Powell: “We see stablecoins as a form of money.”

— CoinOtag EN (@coinotagen) June 21, 2023

During his speech, Powell highlighted that US banks have very strong capital. With the SEC’s lawsuits against crypto exchanges, it is evident that the US is attempting to regulate the crypto sector. However, Powell’s mention of stablecoins in his statements raises questions about whether the US will extend regulations to this area.

In June, the House Financial Services Committee published the third draft of a stablecoin bill, which aimed to combine the views of both sides of the House. The draft requested that the Fed determine the requirements for stablecoin issuance and also allowed state regulators to supervise companies issuing tokens.

Stablecoins as Currency: Implications for the Crypto Sector

Powell’s assertion that stablecoins are viewed as a currency by the US could have significant implications for the crypto sector. As the US continues to regulate the industry, it remains to be seen whether these regulations will extend to stablecoins.

The House’s stablecoin bill is an important step in this direction, as it calls for the Fed to play a more active role in stablecoin issuance and regulation. If the US does decide to regulate stablecoins as a form of currency, it could potentially impact the growth and adoption of these digital assets.

Future of Stablecoins in the US

As the US continues to explore the regulation of the crypto sector, the future of stablecoins remains uncertain. With the Fed Chairman’s recent statements and the House’s stablecoin bill, it is clear that the US is considering the role of stablecoins in the financial system.

However, it remains to be seen how these developments will impact the stablecoin market and whether the US will ultimately decide to regulate stablecoins as a form of currency. For now, the crypto sector will be closely watching the US’s actions in this area.