• Federal Reserve Chair Jerome Powell recently commented on proposed crypto legislation at the House Financial Services Committee’s semi-annual Fed policy hearing, stating that payment stablecoins are a form of money and should be subject to robust federal oversight.
• This opinion runs contrary to those of both SEC Chair Gary Gensler and CFTC chair Rostin Behnam, who have separate opinions on how stablecoins should be treated under U.S. law.
• Powell’s view that allowing private money creation at the state level would be a mistake could shape future crypto regulations in the United States.
Federal Reserve Sees Stablecoin as Form of Money
At the House Financial Services Committee’s semi-annual Fed policy hearing on June 21, Federal Reserve Board Chairman Jerome Powell gave his opinion on draft crypto legislation proposed by Republicans in the United States Congress. He stated that he sees payment stablecoins as a form of money and believes it is appropriate to have “quite a robust federal role in what happens with stablecoin going forward”.
Contrasting Opinions from SEC and CFTC Chairs
Powell’s opinion differs from that of both Securities and Exchange Commission (SEC) Chair Gary Gensler and Commodity Futures Trading Commission (CFTC) chair Rostin Behnam. Gensler has argued that most cryptocurrencies besides Bitcoin should be classified as securities while Behnam claims they should be classified as commodities instead.
Definition of Money vs Definition of Security
While there is no readily available definition of money from the Fed, it is commonly considered to be a means of exchange while commodities are defined under U.S. law as goods or services which contracts for future delivery can be made for. The definition for securities is more intricate than either of these two options however.
Implications for Future Crypto Regulations
Powell’s statement that allowing private money creation at the state level would be a mistake could shape future cryptocurrency regulations in the United States if passed into law alongside this bill or another piece of legislation related to cryptocurrency regulation in some capacity .
Overall, Federal Reserve Chairman Jerome Powell’s opinion on proposed crypto legislation provides insight into how he views payment stablecoins under U.S law and holds implications for possible future crypto regulations in America if passed into law alongside this bill or another piece of related legislation .