Fed’s Powell urges broader regulation for stablecoins (adsbygoogle = window.adsbygoogle || []).push({ }); Tue., September 27, 2022 | Christopher Rugaber, AP Economics Writer Share const shareOpts = {title:’Fedu0027s Powell urges broader regulation for stablecoins’,text:’Federal Reserve Chair Jerome Powell said that stablecoins will need greater regulation as they become more widely used by consumers’,url:’https://www.marketbeat.com/articles/feds-powell-urges-broader-regulation-for-stablecoins-2022-09-27/?utm_source=webshare&utm_medium=Social’}; Share Federal Reserve Board Chairman Jerome Powell speaks during a conversation with leaders from organizations that include nonprofits, small businesses, manufacturing, supply chain management, the hospitality industry, and the housing and education sectors at the Federal Reserve building, Friday, Sept.23, 2022, in Washington.Powell said that stablecoins will need greater regulation as they become more widely used by consumers.Powell delivered his virtual remarks Tuesday, Sept.27, to a conference on digital finance in Paris.(AP Photo/Manuel Balce Ceneta, File) WASHINGTON (AP) — Federal Reserve Chair Jerome Powell said Tuesday that stablecoins will need greater regulation as they become more widely used by consumers.Powell also said, in virtual remarks to a conference on digital finance in Paris, that the Fed hasn’t yet decided on whether to proceed with a digital dollar.
The Fed’s sharp interest rate increases this year, Powell said, have contributed to the collapse of some stablecoins and big drops in the value of cryptocurrencies, a phenomenon some traders have dubbed “crypto winter.” Stablecoins are digital tokens pegged to the value of traditional financial instruments, often the dollar.In May, the stablecoin TerraUSD collapsed, wiping out $40 billion investor funds.Powell said that higher interest rates have revealed the “significant structural issues” that exist in decentralized finance, a broad term that encompasses stablecoins, crypto currencies, and other new technologies.Yet the crypto winter had little impact on traditional finance because for now there is not much overlap between the two, Powell said.But that may not continue.
“There’s a real need for more appropriate regulation,” Powell said, as decentralized finance “starts to touch more and more retail customers.” Earlier this month, in an interview at the Cato Institute, Powell said that anything purporting to be money should be tightly regulated.“If people are going to think something is money, then it needs to actually have the qualities of money,” Powell said.
“If it doesn’t, then I don’t think you want to take money and make it into just another consumer product where sometimes it fails and sometimes it’s good.” Powell also sketched out a cautious path for the United States on the creation of a so-called central bank digital currency, or digital dollar.Digital currencies differ from current forms of electronic money because they would be issued by central banks such as the Fed, rather than a bank.
(adsbygoogle = window.adsbygoogle || []).push({}); More than 100 central banks around the world are considering a digital currency, but just a few have actually issued one.Powell said the Fed is “evaluating both the policy issues and the technology issues” around a digital dollar.
“We have not decided to proceed and we don’t see ourselves as making that decision for some time,” he said.“We see this as a process of at least a couple of years where we’re doing work and building confidence in our analysis and in our ultimate conclusions.” That would put the United States behind many other countries when it comes to a central bank digital currency.China has already tested a digital yuan in some provinces.
Powell also said the Fed would need approval from the White House and Congress to proceed with a digital dollar.Christine Lagarde, president of the European Central Bank, also spoke virtually to the conference and said the ECB plans to decide within a year whether to start developing a prototype of a digital euro.Central banks provide key backing for currencies, and that makes them much more stable than private money, Lagarde said.
“If we are not in that game, if we are not involved in experimenting, in innovating, in terms of digital central bank money, we risk losing the role of anchor that we have played for many, many decades,” she said.Earlier this month, the Treasury Department issued a report that recommended the U.S.work on developing a digital dollar.Also this month, Michael Barr, the Fed’s top financial regulator, said that the central bank should work with other agencies and Congress to toughen oversight of stablecoins.
“Stablecoins, like other unregulated private money, could pose financial stability risks,” Barr said.“History shows that in the absence of appropriate regulation, private money is subject to destabilizing runs, financial instability, and the potential for widespread economic harm.”7 Blue-Chip Dividend Stocks That Won’t be Impacted by Rising Interest RatesStock markets move in cycles.Historically, bull markets last longer than bear markets, but both can last longer than investors expect.But inside bull markets and bear markets, there can still be volatile price changes in the opposite direction.And when the market does reverse direction, the biggest gains are made by investors that stay the course.In a volatile market, one option for staying the course is to invest in quality blue-chip dividend stocks.Blue-chip stocks are companies that have a large market capitalization.
That means there are companies in mature industries.That maturity allows these companies to deliver consistent performance that is independent of whatever is happening with the country’s monetary policy.When interest rates fall, these companies are poised for growth.And when interest rates rise, these companies have strong balance sheets that allow them to maintain pricing power and profits to provide stability.All of this means that investors with lower risk tolerances can stay in the market without having to give up on growth.And in this special presentation, we’re giving investors seven blue-chip names that investors can buy with confidence no matter what is happening with interest rates.View the “7 Blue-Chip Dividend Stocks That Won’t be Impacted by Rising Interest Rates”.document.write(‘https://www.american‘ + ‘consumernews.net/scripts/standalone/ViewCount.ashx?type=j&id=5394939&referrer=’ + encodeURIComponent(document.referrer) + ‘” alt=”” width=”1″ height=”1″ style=”max-width:1px” />’); Free Email Newsletter Complete the form below to receive the latest headlines and analysts’ recommendations for your stocks with our free daily email newsletter: Email Address InvestingChannelQueue = window.InvestingChannelQueue || []; var ic_page; InvestingChannelQueue.push(function () { ic_page = InvestingChannel.UAT.Run(“a55b93bc-f12d-4670-aed7-dff142897ce0”); }); Most Read This WeekThese 3 Big Dividend Payers Also Boast Strong Price Growth Are These Liquid Natural Gas Stocks Ready For An Upside Bounce?2 Semiconductor Stocks To Watch For ReversalsInsider Selling: Mullen Automotive, Inc.
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