Jerome Powell: “stablecoins should be regulated like bank deposits”

US Federal Reserve (FRS) Chairman Jerome Powell believes that stable cryptocurrencies should be regulated like bank deposits and money market mutual funds.

In a speech to the US House of Representatives, Powell said stablecoins should be subject to stricter regulatory scrutiny despite being pegged to fiat currencies. Powell said this when lawmakers raised the issue of the USDT stablecoin, issued by Tether. Tether previously claimed that each USDT is pegged to the real US dollar at a 1: 1 ratio. In May, it became known that 76% of USDT is backed by traditional currencies and liabilities in them.

“Short-term deposits and promissory notes are an investment class of securities with good liquidity. But during a financial crisis, the market simply “disappears” and people want their money back. It’s very simple: stablecoins are also an economic activity. They are very similar to bank deposits and mutual funds, so you need to regulate stable cryptocurrencies in the same way, ”Powell said.

He added that it is customary in the United States to invest in safe assets. However, the regulatory framework that covers bank deposits does not apply to stablecoins. According to the chairman of the Fed, in order for them to become part of the monetary system, it is necessary to develop special provisions that will control stable cryptocurrencies.

Powell also commented on the development of central bank digital currencies. He said that if the state can create a controlled ecosystem of the digital dollar, it will eliminate the need for private cryptocurrencies, including bitcoin. The US will launch several pilot programs to test the digital dollar later this year.

Recall that recently the President of the Federal Reserve Bank (FRB) of Boston, Eric Rosengren (Eric Rosengren) expressed concern that the USDT may disrupt the work of short-term credit markets.