As he delivers his first speech as a Fed official, Michael Barr, a former Ripple Labs adviser, has taken a less positive view of crypto than he reportedly had in the private sector.
On Wednesday, two US government finance leaders delivered presentations in which they aired their views on cryptocurrency legislation. Both were skeptical of cryptocurrency.
Michael Barr, who was recently appointed vice chair of the Federal Reserve Board for supervision, delivered his first address in his new role at the Brookings Institute. Acting Comptroller of the Currency Michael Hsu restated his views on cryptocurrency at The Clearing House and Bank Policy Institute’s annual conference.
“I believe Congress should work expeditiously to pass much-needed legislation to bring stablecoins, particularly those designed to serve as a means of payment, inside the prudential regulatory perimeter,” Barr said.
Meanwhile, in a lecture at a conference organized by The Clearing House and Bank Policy Institute on Wednesday, Fed Vice Chair Lael Brainard stated that the crypto financial system “has all the same risks that we’re very familiar with from traditional finance.”
Stablecoins, according to Brainard, are one of the areas with the greatest potential for risk if not adequately regulated, and such problems could leak over into the main core financial system.
Brainard also stated that the Fed is committed to its interest rate hike campaign to combat inflation but that the central bank would be data-dependent and wary of over-tightening.
In November 2021, the United States President’s Working Group on Financial Markets issued a study on stablecoins, encouraging Congress to pass applicable legislation as soon as possible. US Treasury Secretary Janet Yellen has repeatedly stated that a stablecoin regulatory framework should be ready by the end of this year.
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