Michael Barr, a former Ripple Labs advisory board member and law professor who was appointed by Joe Biden (the U.s President) as a vice-chair for supervision under the Fed (Reserve Bank), suggested that US lawmakers should regulate stablecoins while attempting to address financial stability risks.
In an authorization hearing before the Senate Banking Committee, Barr stated that while innovative technologies such as crypto have the potential to provide economic benefits, there are also some significant risks associated with them. As a result, there is a need for a regulatory agenda to deal with stablecoins in order to protect against the risks of runs.
He went on to say that the Fed’s potential issuance of a CBDC (central bank digital currency) was a problem that required extensive research and consideration, echoing the views of Fed Chairman Jerome Powell on the subject. According to Barr, the rest of the US government’s organizations were responsible for crypto-related investor protection.
According to her, there are risks associated with any investment, and markets typically operate in this manner. However, marketing without adequate rules is considered theft, and at the moment, crypto and stablecoin-related investors do not have the same baseline protections as the rest of the financial markets. Barr was Biden’s second nominee for vice chair of constant monitoring at the US Federal Reserve after Sarah Bloom Raskin withdrew her name in March.
Barr’s appointment to the agency, if approved by the full Senate, would allow him to assist in the development of policy recommendations for regulation and supervision for the rest of the board members, including chair Powell, vice-chair Lael Brainard, Philip Jefferson, Lisa Cook, Christopher Waller, and Michelle Bowman.