Federal Reserve Under Fire for Interfering with Stablecoin Regulation Efforts
Summary:
The Federal Reserve is accused of impeding congressional efforts to regulate stablecoins, as lawmakers object to two letters from the Fed imposing restrictions on crypto activities. These actions are seen as undermining progress made by Congress, potentially discouraging financial institutions from participating in the digital asset ecosystem. The letters supposedly prevent banks from issuing payment stablecoins, and legislators claim they were issued without following the proper procedures. Negotiations on stablecoin regulation may face delays as a result.
The Federal Reserve is allegedly obstructing congressional efforts to regulate stablecoins, as per a letter addressed to Fed Chairman Jerome Powell from Chairman of the U.S. House of Representatives Financial Services Committee Patrick McHenry, along with subcommittee chairs French Hill and Bill Huizenga. The lawmakers expressed their objection to two Fed letters, both of which impose additional restrictions on activities involving cryptocurrencies. They raised concerns that these actions undermine the progress made by Congress in establishing a regulatory framework for payment stablecoins, potentially deterring financial institutions from participating in the digital asset ecosystem. The Fed letters supposedly prevent banks from issuing payment stablecoins, despite appearing as guidelines that outline permissibility. Moreover, the legislators argued that these letters were issued without adhering to the proper notice and comment processes required by law. In the meantime, negotiations on stablecoin regulation may face further delays, providing an opportunity for both sides to engage in additional discussions.
Published At
8/28/2023 8:05:00 PM
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