Stablecoins in particular have historically been viewed by the U.S. Fed as systemically hazardous. It was discovered earlier this year that the Financial Stability Oversight Council has the authority to regulate the crypto asset class. The specified power would then enable the regulators to impose stronger regulations on stablecoins. However, the head of a US government agency expressed satisfaction with the potential of cryptocurrencies.
Plans for Stablecoins and CBDCs by the Fed
Martin Gruenberg, the interim chairman of the Federal Deposit Insurance Corp., discussed the use of stablecoins in a recent article. He discussed the Federal Reserve's intentions for a digital currency issued by the US central bank while speaking on Thursday at the Brookings Institution. He claimed that if institutions had a better grasp of the risks associated with the asset class, industry counsel might be given to them. He continued, "This needs to be done exactly like the risk analysis done with any other endeavor."
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.