The U.S. Fed has traditionally perceived cryptocurrencies, especially stablecoins, as systemically risky. Earlier this year, it was learnt that the Financial Stability Oversight Council is empowered with powers to oversee the crypto class. The designated power would in turn allows the regulators to close in on stablecoins with stricter rules. However, a U.S. agency chief commented on a positive note on the capabilities of the cryptocurrencies.
Fed’s Plans With Stablecoins, CBDCs
In a latest, Martin Gruenberg, the acting chairman of the Federal Deposit Insurance Corp, spoke about stablecoin usage. Speaking at the Brookings Institution on Thursday, he also spoke about the Federal Reserve’s plans on a U.S. central bank digital currency. He said industry guidance could be provided to institutions with an improved understanding of risks involved with the asset class. This needs to be done just like the risk analysis performed with any other activity, he added.
“Banking regulators expect to provide industry guidance to financial institutions on crypto-related activities once agencies better understand the associated risks. We must understand and assess the risks associated with these activities the same way that we would assess the risks related to any other new activity.”
FedNow Integration In Payments
In an encouraging sign, the Federal Deposit Insurance Corp chair said the Fed’s upcoming plans could incorporate stablecoin usage. “A potential future payments system based on the use of stablecoin should complement the Federal Reserve’s forthcoming FedNow service as well as a possible U.S. central bank digital currency.” The FedNow service is a new instant payment service that the Federal Reserve banks are currently developing. The service serves as a platform of innovation for financial institutions and their service providers in providing instant payment services. “The FedNow Service will provide choice in the market for clearing and settling instant payments as well as promote resiliency through redundancy.”
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