Michael Barr Calls For American Lawmakers To Regulate Stablecoins
A former advisory board participant at Ripple Labs and a law professor – Michael Barr – who is the choice of Joe Biden (the United States President) for a vice-chair for supervision under the Fed (Federal Reserve), suggested that the lawmakers of the United States should regulate stablecoins while endeavoring to deal with the hazards related to financial stability.
In an authorization hearing in front of the Senate Banking Committee, Barr stated that innovative technologies taking into account crypto had some capability for getting economic advantage however there are also some important hazards linked to this hence there is a requirement for a regulatory agenda to deal with the stablecoins to have protection from the hazards of runs.
He added that the potential issuance of a CBDC (central bank digital currency) by the Fed counted to be a problem that demanded considerable study and contemplation, reiterating the views of Jerome Powell (the chairman of the Fed) regarding the due diligence. In the words of Barr, the rest of the organizations under the government of the United States were accountable for crypto-related investor protection.
While answering the questions asked by Elizabeth Warren (Senator from Massachusetts) at the hearing, it was confirmed by Barr that no service would be provided by him in any firm offering financial services and likely having assets according to the Federal Reserve, for 4 years after his probable tenure at the government organization. Warren referred to the latest market volatility, in terms of the de-pegging of UST (Terra USD) from the U.S. dollar, and after that targeted the anonymous celebrities who endorse particular crypto schemes.
As per her, there are hazards involved in any investment and markets usually work in this way. However marketing without adequate rules considered being theft, and at the present, crypto and stablecoin-related investors are not provided with baseline protections that are present in the case of the rest of the financial markets. Barr counted to be the second nomination of Biden for the vice chair for supervision at the U.S. Federal Reserve after, in March, Sarah Bloom Raskin withdrew from the nomination.
On being authorized by the complete Senate, the place of Barr at the agency would permit him to assist in structuring policy recommendations regarding regulation and supervision for the rest of the board participants, taking into account chair Powell, vice-chair Lael Brainard, Philip Jefferson, Lisa Cook, Christopher Waller, and Michelle Bowman.
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