The Federal Reserve’s (Fed) vice president of regulatory Michael Barr warned banks about the potential risks of crypto-related activities, suggesting that crypto providers are subject to regulations similar to those of crypto-banking institutions. original
In a keynote address Oct. 12 at DC Fintech Week it seems Barr would encourage banks to explore token issuance on distributed ledger networks “in a regulated and limited manner only,” with the Fed Vice President of Regulatory Affairs recommending that financial institutions cooperate with US regulators. This ensures that activities are “safe, legitimate and legally permitted” regarding use cases of innovative technologies such as crypto and stablecoins.
“The Fed is working with other agencies. to make sure Crypto asset-related activities that banks may engage in are highly regulated and supervised,” Barr said. relating to the crypto assets they operate are legally permitted. and the bank has appropriate measures to manage those risks.”
Barr added that the Fed is “working with other regulators” on a framework for stablecoin, arguing that they tend to “Growing into a cash alternative and becoming a means of payment for transactions” compared to crypto assets, his words followed several lawmakers and regulators who offered solutions to deal with stablecoins. Lawmakers have drawn up a bill calling for a ban on stablecoins algorithms, and Finance Minister Janet Yellen said in May. A “consistent federal framework” on stablecoin would be “extremely appropriate”.
“Congress should work to create a strong federal framework for careful oversight,” Barr said.
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