- The past few months have seen an increase in financial meltdowns in the United States.
- Michael Barr talked about increasing money laundering, theft, high volatility and fraud.
At DC Fintech Week on Oct. 12, Fed Vice Chairman Michael Barr said crypto-related activity could pose “new risks” to banks and their customers, urging the U.S. Federal Reserve to The Society may be encouraged to develop further. rule.
Michael further states: cipher– Asset-related activities that banks may engage in are well regulated and supervised to protect both customers and the financial system. ”
Crypto-prone activity exposes banks to unprecedented risk. Michael stresses that banks must ensure that these activities are legally permitted and be prepared to manage the risks.
During his speech, Michael also discussed key factors such as money laundering, theft, high volatility and fraud.
Barr emphasized that it is impossible to exchange a highly volatile cryptocurrency for fiat currency. He added that stablecoins “will likely function as privately issued money.”
Michael said the Fed is currently working with several regulators to prepare an effective operational framework for stablecoins. In September 2022, Barr made a public recommendation to the U.S. Congress to create a suitable framework for stablecoins.
Federal Reserve Vice Chairman Michael Barr speaks at the Brookings Institution in Washington DC on September 7, 2022. In his talk “Making the Financial System Safer and Fairer,” he describes his Fed’s work in overseeing the safety and soundness of banks. We also support our financial stability mandate.
“Congress will move swiftly to pass much-needed legislation to bring stablecoins, especially those designed to act as means of payment, within sound regulatory boundaries,” Barr said. I think we should work on it,” he said.
He describes stablecoins as “like any other unregulated private money, which can pose risks to financial stability.5 History shows that without proper regulation, private money becomes It represents exposure to stable riots, financial instability, and the potential for widespread economic damage.”
Additionally, on September 7, 2022, FED Vice Chairman Lael Brainard said: cipher Financial system at the conference. The conference is sponsored by the Cleaning House and Bank Policy Institute of New York. She said the crypto financial system “has all the same risks that we are familiar with in traditional finance.”
On May 30, 2022, Brainerd announced that the digital dollar or CBDC will coexist and complement stablecoins and commercial bank currencies while providing secure responsibility from central banks in the existing digital financial ecosystem. I wrote that it is possible. Current commercial bank money.
The Fed Vice Chairman also explained that thoughtful regulation is maximally necessary given the recent collapse experienced by the Terra network’s algorithmic stablecoin UST and its native token LUNA.
She said the digital financial system is undergoing a rapid and ongoing evolution at both national and international levels, leading regulators to frame questions about the need for central bank digitalization. currency today.