Federal Reserve Governor Argues Against Subjecting Stablecoins to Full Banking Regulation – Regulation Bitcoin News

Christopher Waller, Federal Reserve Board Governor says stablecoins don’t need to be subjected to the same regulations as banks. He disagrees with some of the recommendations on stablecoin regulation by the President’s Working Group on Financial Markets. While banks should have the ability to issue stablecoins he explained that not all stablecoin issuesrs must be banks.

Fed’s Waller Disagrees That Stablecoins Need to Be Regulated With Full Banking Regulation

Christopher Waller (Federal Reserve Board Governor) spoke about stablecoin regulation Wednesday at the virtual conference that was hosted by Cleveland Fed.

While emphasizing that “The regulatory and supervisory framework for payment stablecoins should address the specific risks that these arrangements pose — directly, fully, and narrowly,” he noted:

This does not mean that you have to impose the entire banking rulesbook. It is designed in part for lending and not payments.

Waller said that he disagrees with some of the recommendations made by the President’s Working Group on Financial Markets (PWG).

In collaboration with the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency, the PWG released a report about stablecoins in November 1. According to the report, banks should impose bank-like regulation of stablecoins in an atmosphere of urgency.

Waller stated that while he supports stablecoins being issued by banks, he disagrees with the idea that they should only be issued by banks.

Waller made comments on digital currency central banks (CBDCs), an area that is being explored by the Federal Reserve with the aim of releasing a report about a digital dollars in the near future.

Fed governor stated that he was still skeptical about the necessity of CBDC. He argued that the Fed should avoid creating CBDC with the intention to reduce payment costs. He also noted that there is already “real and rapid innovation” in the payments space.

In October, he explained that the Fed would face direct competition from commercial banks if it had a digital currency. He questioned whether this was a wise idea. “I remain skeptical that a Federal Reserve CBDC would solve any major problem confronting the U.S. payment system,” he opined.

Is it your opinion that stablecoin issuers need to be regulated in the same way as banks? Comment below to let us know your thoughts.

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