The US Federal Reserve endorses stablecoins

The US Fed reserve in its latest Financial Stability Report revealed that dollar-pegged cryptocurrencies could help in financial stability. However, it also acknowledges that these coins could have unintended consequences.

The US Federal Reserve, in its latest report on financial stability, said that stablecoins could provide a new medium of exchange. The dollar-pegged cryptocurrencies could be a complement to existing payment systems. The Reserve did not reveal the names of cryptocurrencies. 


US Central Bank emphasizes on regulations of stablecoins

The US Fed reserve made a strong point about regulations of stablecoins. The report mentions that a poorly designed stablecoin could pose risks to financial stability. It further notes that without effective redemption, settlement, and risk management, stablecoins could lead to a “loss of confidence” and mass liquidation, which could harm economic activity in various ways. 

The report notes that stablecoin issuers, operators, and intermediaries have to comply with regulations. 


Fed warns the use of stablecoins for illegal activities.

In its report, US Federal Reserve warns that if not regulated properly, stablecoins could have unintended consequences. It also states that stablecoin operators must prevent money laundering, terrorism, and other criminal activity with their policies. 

The Reserve also informed that it is working with other regulators to ensure that coming legal stablecoins address core legal and regulatory to ensure that stablecoins address core legal and regulatory challenges. Earlier, US Federal Reserve revealed that it is considering a CBDC.

Jai Pratap
A Mass Media Graduate who loves to write. Jai is also a sports enthusiast and a big movie buff. He loves to learn new things.

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