During a recent hearing at the House of Representatives Financial Services Committee, Chair Jerome Powell of the United States Federal Reserve Board expressed his belief that stablecoins should be recognized as a type of money.
Powell’s comments came in response to concerns raised by committee ranking member Maxine Waters regarding a proposed bill on stablecoins. If approved, this bill would mark the first cryptocurrency legislation in the country.
Waters pointed out that the bill could lead to the creation of 58 different licenses, with only two of them receiving federal regulatory approval. The remaining licenses would be issued by states and other jurisdictions, potentially resulting in an unprecedented level of state preemption.
Powell shared Waters’ concerns and cautioned against allowing extensive private money creation at the state level. This is why he supports the regulation of cryptocurrencies. He stated, “Allowing a lot of private money creation at the state level would be a mistake.”
Interestingly, Powell’s standpoint differs from that of Securities and Exchange Commission (SEC) Chair Gary Gensler, who has advocated for the registration and regulation of stablecoins and has classified all cryptocurrencies except Bitcoin as securities.
It also diverges from Commodity Futures Trading Commission (CFTC) Chair Rostin Behnam’s suggestion that stablecoins should be classified as commodities.
Former CFTC Chair Chris Giancarlo also shared his thoughts on the bill, expressing concern over the potential coercion of stablecoin protocols by licensing authorities.
Giancarlo cautioned against implementing a government policy similar to the controversial Operation Choke Point in the past, where businesses faced service denials based on political biases.
These developments underscore the ongoing debate and regulatory challenges surrounding stablecoins in the United States. With regulatory leaders holding different opinions, it remains to be seen how stablecoin regulations will ultimately be shaped.
The outcome will have significant implications for the cryptocurrency industry, as stablecoins continue to play an increasingly prominent role in the digital economy.
Compiled by Coinbold