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<a href="https://bitcoinworld.co.in/fed-official-cautious-about-unregulated-stablecoins-like-usdc-usdt/" title="Fed Official Cautious About Unregulated Stablecoins Like USDC, USDT" rel="noopener noreferrer nofollow"></a> 
In a recent revelation, Michael Barr, a vice chair for supervision at the US Federal Reserve, has voiced apprehensions over the growing influence of unregulated stablecoins pegged to the US dollar. The statement came during a fintech conference at the Federal Reserve Bank of Philadelphia. Barr argues that the proliferation of stablecoins could replace the USD as the de facto currency if left unchecked. 
Highlighting the stakes involved, Barr points out that digital assets like stablecoins could present “significant risks to financial stability, monetary policy, and the US payments system.” Stablecoins, such as USDT and USDC, have become central to the cryptocurrency landscape since introducing the first stablecoin in 2014. 
To underscore the magnitude, consider USDT. Issued by Tether Holdings, it boasts a market capitalization exceeding $83 billion and ranks as the third most valuable cryptocurrency, trailing only Bitcoin and Ethereum. Meanwhile, USDC, despite facing a temporary depegging and market cap slump after the collapse of Silicon Valley Bank (SVB), still holds its place as the second most valuable stablecoin. It outranks well-known cryptocurrencies like Cardano and Tron in market value. 
One key aspect setting stablecoins apart from conventional financial tools is their structure. While they operate on public blockchains such as Ethereum and Polygon, they come into existence through private entities. These entities remain out of the regulatory reach of the Federal Reserve and global financial watchdogs. This framework issues stablecoins like USDT and USDC solely based on market demand. The more people want them, the more they get minted. This market-driven model raises “deep” concerns for Barr. 
To mitigate risks, Barr advocates for regulatory oversight. Specifically, he suggests that issuers of stablecoins, which are pegged to the world’s reserve currency, should come under direct Federal Reserve supervision. By doing so, the central bank could exercise similar control over stablecoin issuers over traditional banks. 
In summary, the Federal Reserve is sending a clear message: the rise of stablecoins poses questions that can’t be ignored, and regulatory steps may be imminent to ensure they don’t undermine the broader financial system. 
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The post <a rel="noopener noreferrer nofollow" href="https://bitcoinworld.co.in/fed-official-cautious-about-unregulated-stablecoins-like-usdc-usdt/">Fed Official Cautious About Unregulated Stablecoins Like USDC, USDT</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://bitcoinworld.co.in">BitcoinWorld</a>.

Fed Official Cautious About Unregulated Stablecoins Like USDC, USDT

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