“Jerome Powell calls for regulations for stablecoins: what does it mean for the future of finance?”


Jerome Powell Calls for Legislative Framework for Stablecoins

The Chairman of the Federal Reserve, Jerome Powell, recently addressed Democrats in the House of Representatives regarding the urgency of creating a legislative framework for stablecoins. Powell emphasized the critical need to regulate the operation of these types of digital payment instruments during a closed-door session of the House Financial Services Committee.

Powell’s Involvement in Stablecoin Regulations

Powell’s call for establishing a legislative framework for stablecoins marks a significant step towards ensuring financial stability and security. His engagement in a dialogue with lawmakers underscores the Federal Reserve’s determination in supervising regulations concerning this innovative form of payment and Central Bank Digital Currencies (CBDC).

Congressional Authorization Needed for CBDC

During discussions on CBDC, Powell made a clear statement – if a Central Bank Digital Currency is to be created, the decision to introduce it must be authorized by Congress. This is an essential step in the potential development of digital currencies issued by central banks.

Pursuit of Central Bank Credibility

During his monetary policy testimony in June 2023, Powell once again emphasized the importance of stable payment instruments, highlighting the need to maintain the credibility of the Federal Reserve in monetary systems. This is a crucial message for financial markets and participants in the payment system.

Laws Supporting Innovative Financial Technologies

In July 2023, the House Financial Services Committee approved two key bills that will impact financial sector regulations. The Financial Innovation and Technology in the 21st Century Act and the Regulatory Clarity for Blockchain Technology Act represent a significant step towards streamlining regulatory actions in the financial sector and the blockchain industry.

Regulations for Blockchain Technology

The bipartisan Regulatory Clarity for Blockchain Technology Act aims to facilitate regulations for entities operating in the blockchain sector, primarily by clarifying the definitions of key concepts and determining which entities qualify as money transmitters. This is a significant stride towards regulating and standardizing operations in the blockchain technology sector.

Related Terms: Jerome Powell, Federal Reserve, stablecoins, CBDC, financial regulations, blockchain technology, financial innovations.

The article summarizes key events related to Jerome Powell’s call for establishing a legislative framework for stablecoins, his involvement in regulations concerning this new form of payment, and significant acts supporting innovative financial technologies and regulations for the blockchain sector. His actions aim to ensure stability and credibility in financial systems and regulate new areas of activity in the field of financial technology.