Randall Quarles, who spoke publicly for the last time as a member of the Federal Reserve Board of Governors, urged regulators to exercise restraint on stablecoins.
In a prepared statement for his speech at the American Enterprise Institute on December 2, Quarles expressed concern that regulations could hinder innovation in digital assets, especially with regard to stack coins. Some approaches to regulating stack coins from the November report of the President’s Financial Markets Working Group are unnecessary, according to the Federal Reserve governor, including “limiting the affiliation of wallet providers to commercial organizations.”
“It’s one thing to say that a stablecoin issuer should be a regulated bank – I think this is probably an exaggeration given that there are quite effective ways for non-banking organizations to address our legitimate regulatory concerns, but at least it is a clear link between existing banking services with intent. Specific requirements that stablecoin issuers must set in order to operate safely. ” “But the assumption that portfolio providers may need to completely disconnect from trading companies” is different. The Federal Reserve Governor added:
“It is not entirely clear what interests regulators would benefit from such a restriction, which is much stricter than what we would require for non-digital assets.”
On November 8, Quarles resigned from his position in the Federal Reserve, where he has served since 2017. He will remain on the board until the end of December, after which there will probably be three seats open for a group of seven. regulators.
During his time in the Federal Reserve, Quarles said that federal agencies need to consider the right regulatory approach before laying the groundwork for overseeing the cryptocurrency market. Before the bullfight in 2017, he argued that widespread use of cryptocurrencies could create “serious problems with financial stability”, and suggested that the government work with banks to create digital payment solutions.
“While activities related to digital assets may be new, regulators do not need to treat these activities differently just because of the nature of technology,” Quarles said in his keynote on Thursday. “We need to focus on the unique risks associated with these activities and avoid unnecessary breaches of their promises.”
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