Reserve

JUST

<p>The Federal Reserve provided new details today on its framework for supervising novel financial activities like cryptocurrencies and stablecoins at the banks it oversees. Stablecoins, a type of cryptocurrency typically pegged to the U.S. dollar, have become increasingly popular for facilitating trades, loans, and value transfers in crypto markets.</p> 
<p>However, in updating its supervision approach, the Federal Reserve also warned that the growing use of stablecoins could<strong><em> “become a source of financial instability” </em></strong>for the broader financial system. The Fed said stablecoins, which now have a market cap of over $100 billion, could face runs and spike in volatility in times of stress.</p> 
<blockquote class="twitter-tweet"> 
 <p lang="en" dir="ltr">JUST IN: <img src="https://s.w.org/images/core/emoji/14.0.0/72x72/1f1fa-1f1f8.png" alt="🇺🇸" class="wp-smiley" style="height: 1em; max-height: 1em;"> Federal Reserve says stablecoins could become a source of financial instability for the broader financial system.</p>— Watcher.Guru (@WatcherGuru) <a href="https://twitter.com/WatcherGuru/status/1706728931871932924?ref_src=twsrc%5Etfw" target="_blank" rel="noopener noreferrer nofollow">September 26, 2023</a> 
</blockquote> 
<p>As part of its novel activities supervision, the Fed clarified the process for banks to engage in certain stablecoin activities like storing reserves backing stablecoin issuance. But it also emphasized the risks associated with banks acting as issuers, dealers or custodians of stablecoins.</p> 
<p>The Fed said its supervision program aims to balance financial innovation benefits with appropriate risk management. But its latest warnings suggest the central bank has growing concerns over potential stability risks from stablecoins going mainstream without proper oversight.</p> 
<div class="bigofferblock margincenter mb30 pt20 pl20 pr20 " style=""> 
 <div class="col_wrap_two mb0"> 
  <div class="offerbox_big_wrap flowhidden"> 
   <div class="image position-relative text-center col_item mobileblockdisplay img-maxh-350 img-width-auto"> <a class="re_track_btn" href="https://captainaltcoin.com/go/etoro/" target="_blank" rel="noopener noreferrer nofollow"> <img decoding="async" class="lazyload" data-skip-lazy="" data-src="https://captainaltcoin.com/wp-content/uploads/thumbs_dir/etoro-ca-1-oyc386si1bdrmhrff7xex5ngu4zikfy3ei6bk0rbb6.png" width="500" alt="We recommend eToro" src="https://captainaltcoin.com/wp-content/themes/rehub-theme/images/default/blank.gif"> </a> 
   </div> 
   <div class="product-summary col_item mobileblockdisplay"> 
    <h3 class="product_title entry-title font150 lineheight25 mb30" id="a-class-re_track_btn-href-https-captainaltcoin-com-go-etoro-target-_blank-rel-noopener-noreferrer-nofollow-span-we-recommend-etoro-span-a"> <a class="re_track_btn" href="https://captainaltcoin.com/go/etoro/" target="_blank" rel="noopener noreferrer nofollow"> <span>We recommend eToro</span> </a> </h3> 
    <div class="rev_disclaimer font70 greencolor lineheight15 mb20"> <strong>74% of retail CFD accounts lose money.</strong> 
    </div> 
    <div class="buttons_col mb25 rh_big_btn_inline"> 
     <div class="priced_block clearfix"> 
      <div> <a class="re_track_btn btn_offer_block" href="https://captainaltcoin.com/go/etoro/" target="_blank" rel="noopener noreferrer nofollow"> Visit eToro Now </a> 
      </div> 
     </div> 
    </div> 
    <div class="bigofferdesc"> <i class="vertmiddle mr10 rhicon rhi-check-circle-solid greencolor font130"> </i>Active user community and social features like news feeds, chats for specific coins available for trading. 
     <br><i class="vertmiddle mr10 rhicon rhi-check-circle-solid greencolor font130"> </i>Wide range of assets: cryptocurrencies alongside other investment products such as stocks and ETFs. 
     <br><i class="vertmiddle mr10 rhicon rhi-check-circle-solid greencolor font130"> </i>Copy trading: allows users to copy the trades of leading traders, for free. 
     <br><i class="vertmiddle mr10 rhicon rhi-check-circle-solid greencolor font130"> </i>User-friendly: eToro’s web-based platform and mobile app are user-friendly and easy to navigate. 
     <br><i class="vertmiddle mr10 rhicon rhi-check-circle-solid greencolor font130"> </i>eToro offers staking for certain popular cryptocurrencies like ETH, ADA, XTZ etc. 
    </div> 
   </div> 
  </div> 
 </div> 
</div> 
<p>The post <a rel="noopener noreferrer nofollow" href="https://captainaltcoin.com/federal-reserve-warns-stablecoins-usdt-usdc-pose-financial-stability-risks/">Federal Reserve Warns Stablecoins (USDT, USDC) Pose Financial Stability Risks</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://captainaltcoin.com">CaptainAltcoin</a>.</p>

Federal Reserve Warns Stablecoins (USDT, USDC) Pose Financial Stability Risks

Table of Contents

CaptainAltcoin

Other articles published on Sep 26, 2023

Crypto Asset Management Industry Could Reach $650B in Five Years, Up From $50B Today: Report

How to Deposit in Pylon ecosystem?

XPEV Stock Price Falls Below 50-Day EMA, Is the Price Discounted?

Cryptocurrency Chaos: Chase Bank's Crypto Payment Ban Signals Growing Divide Between Banks and Di...

UNUS SED LEO: Can LEO Price Boost Upwards to $10 and More?

Kraken Receives EMI Licence in Ireland and VASP Registration in Spain!

Join our free newsletter for daily crypto updates!