Federal Reserve Chairman Jerome Powell told House Democrats this week that stablecoins need a regulatory framework. He supported negotiations around pending stablecoin legislation in a private meeting with the House Financial Services Committee.
An attendee of the meeting reported that Powell supported establishing guidelines for stablecoins, indicating pleasure with the near completion of this progress. However, he also remarked on central bank digital currencies (CBDCs). The Fed has researched a potential digital dollar but has not formally recommended Congress approve one.
Based on the account of the meeting, Powell stated that Congress would need to authorize the establishment of a CBDC if it were to be implemented. His remarks signal that the Fed needs legislative directives as it weighs digital currency projects.
Powell has previously said a digital dollar could carry risks and benefits. Congress is currently negotiating a stablecoin bill that could appoint authority. Lawmaker input will also shape any eventual CBDC.
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