The 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 lack of transparency within the decentralization finance ecosystem, according to Powell at a panel discussion on digital finance organized by Banque de France.
We need to be very careful about how the activities of criptocurrencies are taken within the regulatory perimeter. As more and more retail customers become more and more retail customers, appropriate regulation is in place, and there's a need for more appropriate regulation. They need the same risk, same regulation wherever they take place. He said that stable coins, a digital asset that tries to peg its value to a conventional currency, such as the US dollar, 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's our main focus right now, according to Powell.