Federal Reserve Chairman Advocates for Legislative Framework on Stablecoins and CBDCs

Jerome Powell, the Chairman of the Federal Reserve, recently engaged in discussions with House Democrats to underscore the importance of establishing a legislative framework for stablecoins.

“In the pursuit of a regulatory foundation for stablecoins, I am highly supportive and pleased with our progress,” Powell expressed during a private session with the House Financial Services Committee.

This interaction with legislators highlights the Federal Reserve’s dedication to implementing stringent regulations for stablecoins and Central Bank Digital Currencies (CBDCs).

Powell pointed out the necessity for congressional approval for the introduction of a CBDC, as reported by Politico, emphasizing the importance of such authorization.

The subject of stablecoins and their regulation by the Federal Reserve was also a key topic in a monetary policy hearing in June 2023. Here, Powell reiterated the significance of maintaining the central bank’s credibility in the financial system.

In July 2023, the House Financial Services Committee passed two significant pieces of legislation: The Financial Innovation and Technology for the 21st Century Act and the Blockchain Regulatory Certainty Act. The former outlines registration requirements for crypto businesses with the CFTC or SEC and establishes a certification process for decentralized initiatives.

The bipartisan Blockchain Regulatory Certainty Act seeks to simplify the regulatory landscape for blockchain companies, specifying criteria for those considered as money transmitters.

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