Federal Reserve official Michael Barr on Friday expressed deep concerns about the issuance of stablecoins without stringent federal oversight.
Speaking at a fintech conference, Barr highlighted the potential threats stablecoins could bring to financial stability, U.S. payments, and monetary policy. He recognized the swift advancements in the payment sector but stressed the need for strong regulatory and legislative measures to tackle new risks.
This sentiment will be further explored at Benzinga's Future of Digital Assets conference, scheduled for Nov. 14, where industry experts will provide cutting-edge insights on the future trajectory of digital currencies and their impact on global financial systems.
"The Federal Reserve has made no decision on issuing a CBDC and would only proceed with the issuance of a CBDC with clear support from the executive branch and authorizing legislation from Congress."
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However, the focal point of Barr's address was his deep concern regarding stablecoins, digital tokens pegged to government-issued currencies like the U.S. dollar.
He emphasized the need for an appropriate federal prudential oversight framework for stablecoin offerings, to prevent potential threats to financial stability or the integrity of the payments system.
Barr said, "I remain deeply concerned about stablecoin issuance without strong federal oversight."
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