Stablecoins unregulated: Fed to create new crypto team
The Federal Reserve’s Vice Chair for supervision, Randal Quarles, has created a new team focused on monitoring and regulating the crypto industry. Quarles emphasized that feeding does not want to hinder innovation. It is crucial to ensure that regulations are in place to protect both household and the financial system. So here we will discuss about US Fed to create new crypto team amid concerns about unregulated stablecoins.
The main goal of this team is to support the Federal Reserve in staying current with new developments in the crypto industry. It ensures that any regulatory measures taken are effective and appropriate.
Quarles also strained that the regulatory process needs to be a “deliberative process” to balance over-regulation, which could smother innovation, and under-regulation, which could considerably harm the family circle and the financial system.
However, one area of the crypto industry that Quarles highlighted as a potential concern is stablecoins. He claimed that many stablecoins in circulation have illiquid assets backing them. He is making it difficult to sell them for cash when needed.
According to Quarles, this divergence between value and liquidity could create a classic bank. It runs scenario puts households, businesses and the broader economy at risk. Some in the crypto industry have criticized Quarles’s comments, arguing that they are inconsistent.
Caitlin Long, the CEO of Custodia Bank, repeatedly rejected joining the Federal Reserve System. Quarles about Stablecoins and bank runs were ironic, given her belief that Silvergate Bank collapsed as a result of a bank run.
Despite criticism, creating the new crypto team at the Federal Reserve represents an important development for cryptocurrencies. US fed to create new crypto team amid concerns about unregulated stablecoins.
As the crypto industry continues to evolve, regulators will likely become increasingly involved in shaping the industry’s future. The challenge for regulators will be balancing innovation, consumer protection, and financial stability.