- Vice Chair Michael Barr reiterated the need for greater oversight of stablecoins, citing risks due to their use as private money and borrowing trust from central bank currencies.
- Barr discussed the Federal Reserve’s role in driving payments innovation through systems like FedNow, while researching central bank digital currencies.
- Barr’s comments indicate stablecoin regulation remains a top policy issue for US officials as adoption rises, with additional rules seeming likely given bipartisan support.
The US Federal Reserve’s Vice Chair Michael Barr has reiterated calls for greater oversight of stablecoins. His comments come as policymakers grapple with how to regulate these dollar-pegged digital assets.
Barr Highlights Stablecoin Risks
Speaking at a payments conference, Barr argued stablecoins need “appropriate oversight” given their use as private money. He said stablecoins borrow trust from central bank currencies due to their peg. Barr added the Fed has an interest in ensuring stablecoins don’t threaten financial stability or payments systems.
The Importance of Fed Policy
Barr also discussed the role of the Federal Reserve in driving payments innovation. He touted the Fed’s instant payments system FedNow. Barr said the Fed is researching central bank digital currencies but has made no decision to issue one yet.
International Cooperation and Financial Inclusion
The conference agenda also covered international collaboration on payments and expanding access through lower costs. Barr’s remarks indicate stablecoins remain a top policy issue as adoption increases.
Conclusion
Barr’s latest comments show stablecoin regulation is still front of mind for US officials. With bipartisan support for oversight, additional rules for these digital assets seem likely. The details of any framework remain to be seen.
