In testimony today at a twice-yearly hearing on monetary policy, Federal Reserve Chairman Jerome Powell argued for the need for strong central-bank oversight in stablecoin regulations being crafted by lawmakers in the House Financial Services Committee. “We do see payment stablecoins as a form of money, and in all advanced economies, the ultimate source of credibility in money is the central bank,” Powell said. “We believe it would be appropriate to have quite a robust federal role.”
The panel, led by Chairman Patrick McHenry (R-N.C.), is scheduled to mark up two crypto bills in late July. Rep. Maxine Waters (D-Calif.), the committee’s ranking Democrat, noted that the latest legislative proposal from Republicans would leave the Fed “severely hamstrung” and that it needs to establish a strong federal floor for oversight of nonbank stablecoin issuers.
Powell also mentioned that the Fed’s staff has been involved in talks with lawmakers from both parties on the crypto legislation. Significant crypto legislation hasn’t yet cleared a committee in either the House or Senate in the years such efforts have been discussed.