Federal Reserve Chair Jerome Powell said on Tuesday that digital assets require appropriate regulations to ensure a level playing field and protect consumers.
There are very significant structural issues around the lack of transparency in the decentralization finance ecosystem, according to Powell during a panel discussion on digital finance organized by Banque de France.
We need to be very careful about how activities with cryptocurrencies are taken within the regulatory perimeter. There needs to be more appropriate regulation so that when the decentralization of finance expands and more retail customers becomes more and more retail customers, appropriate regulation is in place. They need the same risk, same regulation wherever they take place. He said that stable coin, a coin that attempts to peg its value to a conventional currency, such as the U.S. dollar, is quite different from unbacked crytpo assets, they require careful monitoring.
If you're going to have private money creation across the country, there needs to be a federal role. We think it should be the Fed that plays that role. That is our main focus right now, according to Powell.