Federal Reserve Chair Powell asserts stablecoin's monetary status, demanding robust oversight to address its regulatory implications
Jerome Powell, Chair of the United States Federal Reserve Board; Image: Kevin Lamarque/ Reuters
During a recent House of Representatives Financial Services Committee hearing, Jerome Powell, Chair of the United States Federal Reserve Board, shared the board's perspective on stablecoins, considering them a form of money.
This statement was made in response to inquiries about a proposed stablecoin bill, which is the first crypto legislation in the country and was introduced by the Republicans.
Ranking committee member Maxine Waters expressed concerns about the bill, particularly regarding creating 58 licences, with only two requiring federal regulatory approval. Waters viewed this arrangement as an expansion of state preemption.
In reply, Powell affirmed the Federal Reserve's position, stating, "We do see payment stablecoins as a form of money, [...] and we believe that it would be appropriate to have quite a robust federal role in what happens in stablecoin going forward." He emphasised the potential risks of allowing extensive private money creation at the state level.
Powell's perspective diverges from that of Gary Gensler, Chair of the Securities and Exchange Commission (SEC), who has previously indicated that stablecoins might necessitate registration and regulation. Gensler has consistently asserted that all cryptocurrencies, except Bitcoin (BTC), should be classified as securities.