Fed Chair Powell Advocates for Stablecoin Regulation in the U.S.

The head of the Federal Reserve, Jerome Powell, expressed his support for cryptocurrency legislation currently under consideration by Congress. He emphasized the necessity for the country to establish a regulatory framework for stablecoins.

_Powell stated, «It’s great that these bills are moving forward. We need a structure for stablecoins.»_

Last week, the Senate passed the GENIUS Act, a bill that sets rules for the issuance and circulation of stablecoins. The document is now awaiting deliberation in the House of Representatives. Additionally, work is underway on the CLARITY Act, which aims to clarify the structure of the cryptocurrency market.

Powell’s endorsement followed a decision by the Federal Reserve to no longer consider «reputational risk» when evaluating banks. Previously, this factor was used against financial institutions involved with the crypto industry.

The Fed’s Vice Chair had previously dismissed accusations of debanking the digital asset sector in the U.S. He stated that the agency maintains a balanced approach to the access of crypto companies to banking services.

_Powell added, «We believe that banks should decide who their clients are. They are also free to conduct operations with cryptocurrencies as long as it does not pose risks to their safety and soundness.»_

He also highlighted the issue of service denial to firms in certain sectors, including cryptocurrency. According to him, «over the course of 2024, the Fed has recognized the seriousness of this situation.»

Furthermore, Powell noted a shift in Wall Street’s perception of technology, anticipating increased activity in the digital asset sector.

It’s worth recalling that in April, former President Donald Trump demanded Powell’s resignation due to the slow pace of interest rate cuts.