Top Fed Official Sounds Alarm on Stablecoins: ‘Could Pose a Risk to Financial Stability’

Top Fed Official Sounds Alarm on Stablecoins: ‘Could Pose a Risk to Financial Stability’
A gold plated souvenir cryptocurrency Tether (USDT) coin arranged beside a screen displaying U.S. dollar notes in an illustration picture taken in London on May 8, 2022. Justin Tallis/AFP via Getty Images
Benzinga
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Stablecoins are usually described as the remedy to the volatility of cryptocurrencies. However, Michael S. Barr, vice chair for Supervision for the U.S. Federal Reserve is worried they could “pose a risk to the financial stability” of the country.

Barr said it is important to get the regulatory framework right. “The President’s Working Group report on stablecoins that came out about a year ago called upon Congress to take the necessary action to ensure that stablecoins, particularly those that serve as a means of payment, are subject to prudential regulation,” Barr said in his speech at D.C. Fintech Week.