{"id":6192,"date":"2023-10-28T00:03:28","date_gmt":"2023-10-28T00:03:28","guid":{"rendered":"https:\/\/infundpros.com\/markets\/crypto\/fed-reserve-official-michael-barr-calls-for-stablecoin-regulation\/"},"modified":"2023-10-28T00:03:29","modified_gmt":"2023-10-28T00:03:29","slug":"fed-reserve-official-michael-barr-calls-for-stablecoin-regulation","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=6192","title":{"rendered":"Fed Reserve Official Michael Barr Calls for Stablecoin Regulation"},"content":{"rendered":"<div>\n<figure id=\"attachment_122217\" aria-describedby=\"caption-attachment-122217\" style=\"width: 1200px\" class=\"wp-caption aligncenter\"><noscript><\/noscript><figcaption id=\"caption-attachment-122217\" class=\"wp-caption-text\">Federal Reserve Vice Chair for Supervision Michael Barr Source: YouTube\/FederalReserveBoston<\/figcaption><\/figure>\n<p>US regulators are finally discussing the subject of fiat-backed digital assets, popularly known as stablecoins.<\/p>\n<p>According to Federal Reserve Vice Chair for Supervision Michael Barr, it\u2019s imperative that stablecoins also fall under the supervisory oversight of the government.<\/p>\n<p>Presenting his idea at a Washington DC-hosted conference, Barr stated unequivocally that the ability of a stablecoin to be pegged to any government-issued currency makes it private money.<\/p>\n<p>Furthermore, these digitized fiat currencies serve as means of payment and value storage mechanisms, meaning they are borrowing the trust of the central bank.<\/p>\n<p>Barr, who was appointed by President Biden as the Federal Reserve\u2019s top bank cop, has argued that stablecoins must be regulated in light of these strong indicators.<\/p>\n<p>Expanding on his stance, he noted that it is essential for stablecoins to be subject to a proper prudential financial framework to avoid posing risks to financial stability or the integrity of payment systems.\n<\/p>\n<blockquote>\n<p>\u201cWe also have provided proper guidance to the banks that we supervise on how they should engage with their supervisors when considering use of these products,\u201d Barr added.<\/p>\n<\/blockquote>\n<p>\nBarr\u2019s remarks tie into the growing belief amongst US regulators on the need for a strong handle on the crypto space.<\/p>\n<p>In recent years, calls for appropriate oversight of the fast-growing decentralized economy have echoed through the walls of Washington DC. However, stablecoins have been the least considered.<\/p>\n<p>So far this year, the Feds, which serves as the US equivalent of a central bank, has taken a more cursory look at the potential impact a privately controlled digitized sovereign currency could have on the economy.<\/p>\n<p>To that end, the Federal Reserve launched a new set of guardrails specifically targeted at crypto assets and stablecoins in August this year.<\/p>\n<p>In its set of rules, the Feds announced the launch of a new program codenamed SR 23-7, which stands for its Novel Activities Supervision Program.<\/p>\n<p>In this new setting, the Feds said it seeks to enhance the supervision of novel technologies utilized by banking institutions under its purview.<\/p>\n<p>These novel technologies targeted crypto assets, blockchain technology, and complex, technology-driven partnerships with non-banking entities to deliver financial services to customers.<\/p>\n<p>Regarding the objectives of the SR 23-7 program, the central bank specified that it would be risk-focused and complementary to existing supervisory guidelines designed to regulate banking activities.<\/p>\n<p>In a related press release, the Federal Reserve stated that banks would not be stopped from participating in stablecoin activities.<\/p>\n<p>However, they would be required to prove to the nation\u2019s lender of last resort that the appropriate safety guards are in place before commencing.\n<\/p>\n<h2>A CBDC Decision Not Yet Made<\/h2>\n<p>\nBarr, who serves as the Vice Chair for Supervision, also touched on the age-long quest for a central bank digital currency (CBDC) in his address.<\/p>\n<p>He stated that the central bank is currently consulting with a broad range of experts on the most robust and appropriate emerging technology that would support a sovereign-backed digital currency.<\/p>\n<p>This research is focused on end-to-end system architecture, security, verification, and tokenization models for CBDCs. However, he stated that no unanimous decision had been made on whether a CBDC should be issued.<\/p>\n<p>The Fed official, however, stated that the decision ultimately lies with the US Congress and White House.<\/p>\n<p>While the US has been reluctant to kickstart a CBDC program, its European counterpart is going full thrust with plans for a digital Euro.<\/p>\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\">\n<p lang=\"en\" dir=\"ltr\">The euro is key to our European unity. A digital euro, existing alongside cash, would future-proof our currency. It would be safe, easy to use and free of charge.<\/p>\n<p>While the decision whether to issue a digital euro will be taken later, we\u2019re now launching the preparation phase. <a rel=\"nofollow\" href=\"https:\/\/t.co\/fs81p7otVW\">pic.twitter.com\/fs81p7otVW<\/a><\/p>\n<p>\u2014 Christine Lagarde (@Lagarde) <a rel=\"nofollow\" href=\"https:\/\/twitter.com\/Lagarde\/status\/1715019514985775178?ref_src=twsrc%5Etfw\">October 19, 2023<\/a><\/p>\n<\/blockquote>\n<p>According to an October 19 tweet on X (formerly Twitter) by European Central Bank (ECB) head Christine Lagarde, the governing council of the ECB has given the green light to kickstart the preparation phase.<\/p>\n<div class=\"newsletter home-newsletter single\">\n<div class=\"left-side\">\n<p>\n        <em><br \/>\n            Enter your email for our Free Daily Newsletter        <\/em>\n    <\/p>\n<p> A quick 3min read about today&#8217;s crypto news!<\/p>\n<p>    <span class=\"response-msg\" id=\"newsletter-response\"><\/span>\n<\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p><script async src=\"\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><br \/>\n<br \/>Read the full article <a href=\"https:\/\/cryptonews.com\/news\/fed-reserve-official-michael-barr-calls-for-stablecoin-regulation.htm\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Federal Reserve Vice Chair for Supervision Michael Barr Source: YouTube\/FederalReserveBoston US regulators are finally discussing the subject of fiat-backed digital assets, popularly&#8230;<\/p>\n","protected":false},"author":1,"featured_media":6193,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[28],"tags":[],"class_list":{"0":"post-6192","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-crypto"},"yoast_head":"<!-- This site is optimized 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