The Chair of the U.S. Federal Reserve (Fed), Jerome Powell, acknowledged that digital assets are already becoming mainstream, so it is time to create a special legal framework for stablecoins.
At a panel discussion at the Economic Club of Chicago, Powell noted that the cryptocurrency industry has evolved, remaining attractive to the public even after a "series of failures and frauds."
Powell stated that in 2022 and 2023, when the industry was marked by high-profile bankruptcies of crypto lenders, including the collapse of the FTX exchange, the Fed collaborated with Congress. The regulator tried to create a foundation for a legal framework for stablecoins, which would have been a good starting point; however, those efforts were in vain at that time.
"The regulatory climate is changing, the popularity of cryptocurrencies is growing, and they are being widely adopted in various sectors, so Congress is once again exploring the development of laws to regulate stablecoins," Powell said.
The Fed Chair has repeatedly stated the need to create such legislation. In June 2023, he spoke before the House Financial Services Committee, stating that stablecoins are a "form of money" that requires strict federal oversight.
In February, Powell promised that the U.S. would not issue a digital dollar, as many senators are concerned that the Fed's digital currency could undermine citizens' privacy.