Michael Barr suggested that financial institutions interact with U.S. regulators to confirm “safe, sound, and wrongfully permissible” activities regarding the utilization cases of innovative technologies.
Michael Barr, the vice chair for direction for the united states Fed, warned banks of the potential risks of crypto-related activities, suggesting crypto service suppliers be subject to similar rules as ancient money institutions.
In written remarks ready for an October. twelve speech at D.C. Fintech Week, Barr gave the impression to encourage banks to explore issue tokens on distributed ledger networks, however “only in a very controlled and restricted manner.”
The Fed vice chair for direction steered that money institutions interact with U.S. regulators to confirm “safe, sound, and wrongfully permissible” activities concerning the employment cases of innovative technologies like crypto and stablecoins. “The [Fed] is working with our colleagues at the office of the comptroller of the Currency and also the Federal Deposit Insurance Corporation to confirm that crypto-asset-related activities banks may become involved in are well regulated and supervised, to guard each customers and also the financial set-up,” same Barr. “Many of those activities cause novel risks, and it's important for banks to confirm that any crypto-asset-related activities they conduct are legally permissible which banks have appropriate measures in situ to manage those risks.”
Barr intercalary that the Fed was “working with different regulative agencies” on a framework for stablecoins, claiming they were a lot of likely to “grow into cash substitutes and become a viable suggests that to purchase transactions” as hostile crypto assets. His remarks followed several lawmakers and regulators proposing solutions to handle stablecoins. Lawmakers have written legislation job for a ban on recursive stablecoins, and Treasury Secretary Janet Yellen same in might that a "consistent federal framework” on stablecoins would be “highly acceptable.”
“Congress ought to take action to supply a robust federal framework for prudent oversight, and regulators should additionally use existing authorities,” said Barr.
( Turner Wright, Cointelegraph, 2022 )