Fed Chairman Jerome Powell has made the latest comments about the role of stablecoins in the main system.
On the evening of September 8, Fed Chairman Jerome Powell gave a speech at a Cato Institute conference. He commented that there needs to be a set of laws governing stablecoins. In fact, the sector is not strictly regulated, although it has a beneficial impact on the financial system.
“We don’t want to get in the way of proper innovation. However, stablecoins will need to be regulated appropriately and need regulation. They must provide consumers with clarity, transparency and full guarantees of highly liquid quality assets.”
In addition to this, the Fed chairman also mentioned the emergence of a digital dollar (CBDC). However, whether to issue this currency or not needs to consider privacy issues.
This view is fully consistent with the consideration of US Treasury Secretary Janet Yellen in December 2021, although the Fed has previously officially published important research reports on CBDCs. Recently, Fed Vice Chairman Lael Brainard also stated that if in the case of starting CDBC, it will take the US another 5 years to realize this goal.
According to chairman Jerome Powell’s latest statement, it is possible to assess that the Fed is not too negative about stablecoins if it does not want to assert that it is setting certain expectations about this segment. Notably, in October 2021, the Fed Chairman once confirmed that the agency has no intention of banning Bitcoin and cryptocurrencies.
However, shortly after the news came out, the Bitcoin price made an impressive recovery, rising by more than 6% in the past 24 hours and trading at around $20,500.
However, that is not enough for Bitcoin and the entire crypto market to regain the losses of about 2 weeks ago, which was also affected by the Fed’s annual policy speech at the Jackson Hole Conference.
On September 13, the Fed will release its Consumer Price Index (CPI) data, a measure of the US economy’s Inflation rate from which to decide to raise interest rates on September 21. Therefore, investors should be careful because this period of time will make the market extremely volatile.
