Stable Coins Should Be More Tightly Regulated, Fed Chairman Tells Congress

Fed Chairman Jerome Powell said before the House of Representatives today that stable coins should be subject to stricter regulations and considered as bank deposits or money market funds.

A stable coin is a type of crypto domain that depends on the price of a physical currency, usually the US dollar. The idea is that the pin keeps the price of the currency” stable ” and gives traders some flexibility and transparency without the volatility of the cryptocurrency.

Rep. Anthony Gonzalez (R-OH) asked Powell who most controls the business practices of the now most valuable stable coin and supporting company. Although Teter once claimed that each of their money was secured by a real dollar found somewhere in the bank, most of the support was known to come from commercial securities or debts.

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“Commercial papers are short-term commitments of overnight companies and in most cases they are investment quality, in most cases they are very liquid, they are all good,” Mr Powell said. But during the recent financial crises, he said, ” the market is just disappearing. And then people want to take their money. It’s all very simple: it’s an economic activity that is very similar to bank deposits and money market funds and needs to be regulated in a similar way.”

Powell appeared before the House Financial Services Committee to present his semiannual monetary policy report, which included both a prepared statement and a series of answers to lawmakers ‘ questions.

The regulatory framework for deposit and money market funds” that doesn’t really exist for stable money “before explaining,”in this country we have a tradition of public money where it is considered a very safe asset,” he said.

Powell said: “We don’t think there will be crypto assets if they become an important part of the payment universe, but there could be stable coins

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