Fed Chair Acknowledges Payment Stablecoins as Money, Calls for Robust Federal Role
During the semi-annual hearing on Fed policy at the House of Representatives Financial Services Committee, United States Federal Reserve Board Chair, Jerome Powell, affirmed that payment stablecoins should be considered a form of money [Date: June 21]. Powell’s response came when questioned by committee ranking member Maxine Waters regarding the proposed stablecoin bill, which, if passed, would be the first cryptocurrency legislation in the country.
Waters expressed her concerns about the bill, stating that it would introduce “58 different licenses with federal regulatory approval over only two of the licenses.” The remaining licenses would be issued by states, territories, and other jurisdictions, which she believed would escalate state preemption to an unprecedented level. In response, Powell stated:
“We do see payment stablecoins as a form of money, […] and we believe that it would be appropriate to have quite a robust federal role in what happens in stablecoin going forward.”
“Allowing a lot of private money creation at the state level would be a mistake,” he emphasized.
Powell’s comments on the draft bill position him in opposition to the viewpoint expressed by Securities and Exchange Commission (SEC) Chair, Gary Gensler. Gensler, during a Senate Banking Committee hearing last year, stated that stablecoins may require registration and regulation, consistently maintaining that all cryptocurrencies, excluding Bitcoin, should be classified as securities.
