Fed Chair Powell Talks About DeFi and Stablecoins at a Banque of France Conference PlatoBlockchain Data Intelligence. Vertical Search. Ai.

Fed Chair Powell Talks About DeFi and Stablecoins at a Banque of France Conference

On Monday (September 27), Federal Reserve Chairman Jerome Powell shared his thoughts on the regulation of the crypto industry during a speech at the Banque of France conference “Opportunities and challenges of the tokenisation of finance: which role for Central Banks?”.

These comments were made at a roundtable (“How should central banks address financial stability challenges related to digitalization of financial services?”) moderated by Bank of France governor François Villeroy de Galhau where the speakers were BIS General Manager Agustin Carstens, ECB President Christine Lagarde, Monetary Authority of Singapore Managing Director Ravi Menon, and Fed Chair Jerome Powell.

According to a report by The Daily Hodl, Powell had this to say about DeFi:

Within the DeFi ecosystem, there are these very significant structural issues around a lack of transparency. The good news, I suppose, is that from a financial stability standpoint, the interaction between the DeFi ecosystem and the traditional banking system and the traditional financial system is not that large at this point. So we were able to witness the DeFi winter and it didn’t have significant effects on the banking system and broader financial stability and that’s a good thing. I think it demonstrates the weaknesses and work that needs to be done around regulation, carefully and thoughtfully.

As for stablecoins, he said:

On stablecoins in particular, most of the usage of stablecoins now is on the crypto platforms. In effect, stablecoins are a money-like asset that is used to settle transactions on DeFi platforms. But many stablecoin issuers are talking about it, and there’s a great deal of interest everywhere, among potential stablecoin issuers to reach the general public more broadly, including retail payments.

That’s really what our main focus from a regulatory standpoint is. Should stablecoins be used in that way? Much more broadly, much more public facing, away from the crypto platforms? What’s the appropriate regulatory structure? And we have a group of US regulatory agencies under the leadership of the Treasury Department put together an analysis and a proposal and we encourage Congress to pass legislation that is needed for stablecoins.

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On September 21, at the press conference following the conclusion of the two-day FOMC meeting, the Fed announced that it was raising the federal funds rate by 0.75%, and Fed Chair Jerome Powell had this to say at the press conference:

My colleagues and I are strongly committed to bringing inflation back down to our 2 percent goal… At today’s meeting the Committee raised the target range for the federal funds rate by 3/4 percentage point, bringing the target range to 3 to 3-1/4 percent… As shown in the SEP, the median projection for the appropriate level of the federal funds rate is 4.4 percent at the end of this year, 1 percentage point higher than projected in June. The median projection rises to 4.6 percent at the end of next year and declines to 2.9 percent by the end of 2025, still above the median estimate of its longer-run value.

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  • Source: https://www.cryptoglobe.com/latest/2022/09/fed-chair-powell-talks-about-defi-and-stablecoins-at-a-banque-of-france-conference/

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