During the semi-annual hearing on Fed policy at the House of Representatives Financial Services Committee, Federal Reserve Chair Jerome Powell stated that payment stablecoins were a form of money and suggested a need for a federal role in their oversight going forward. This comment came in response to a proposed stablecoin bill from the Republicans that would issue 58 licenses with federal regulatory approval over only two. Powell argued that allowing too much private money creation at the state level would be a mistake.
Powell’s stance is distinct from that of Securities and Exchange Commission Chair Gary Gensler, who has suggested that stablecoins may require registration, and Commodity Futures Trading Commission Chair Rostin Behnam, who believes stablecoin will be determined to be a commodity. Former CFTC Chair Chris Giancarlo wrote an editorial in The Hill stating that the proposed bill could allow licensing authorities to deny services to lawful but politically disfavored businesses.
Overall, the Federal Reserve’s comments suggest that it wants to take a more active role in regulating stablecoins and ensure that there is a robust federal framework for such cryptocurrencies.