Fed chair Powell says stabelcoins can be useful under proper regulation
Jerome Powell said that Stabelcoins can be used perfectly with high efficiency if they can be regulated properly under better framework, in order to spread trust among users.
At present, US lawmakers are worried about stabelcoins more than crypto assets. Many times many regulators raised their concerns on the stablecoins based operations under crash sell.
Jerome Powell, United States Federal Reserve chair, speaking during a conversation with the Wall Street Journal on Tuesday, tried to give hint that US Government agencies are not concerned about the instability factors because of the crypto industry but they will monitor the development in the crypto space.
Responding to a question asked by Michael Derby of the Wall Street Journal, Powell showed huge support for the report released on 1 November by the President’s Working Group on Financial Markets.
According to the published report by the President’s Working Group on Financial Markets, all the Stablecoin issuers should be regulated just like Banks regulation, to keep the possible risks away.
Fed chair added:
“Stablecoins can certainly be a useful, efficient consumer-serving part of the financial system if they’re properly regulated”
Powell also appreciated the potential of stabelcoins issuer company but at the same time he noted that there is a need to work with large tech networks.
“They have the potential to scale, particularly if they were to be associated with one of the very large tech networks that exist.”
Further, Powell explained why stablecoins based operations needed to regulate, perhaps most of the stabelcoins issuer is working under a better framework. Powell added:
“You could have a payment network that was immediately systemically important that didn’t have appropriate regulation and protections. The public relies on the government and the Fed, in particular, to make sure that the payment system is safe and reliable.”
Overall Powell tried to explain that people will easily trust stabelcoins just like fiat Money, if perfect regulation of government agencies will ensure the safety of stablecoins use and that will never end up in crash sell.
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