Federal Reserve Governor Christopher Waller has advocated for a regulatory framework that permits both banks and non-banks to issue stablecoins in a controlled environment.
According to a Bloomberg report, Waller emphasized that stablecoins could enhance the global reach of the U.S. dollar. However, their growth and adoption depend on clear and well-defined regulations.
Speaking at a conference in San Francisco, Waller stressed the need for a regulatory framework that directly and comprehensively addresses the risks associated with stablecoins. He believes that such a framework should support the issuance of stablecoins by both traditional banks and non-bank entities while considering its impact on the payments ecosystem.
Stablecoins are digital assets designed to maintain a stable value by being pegged to fiat currencies like the U.S. dollar or Treasury bills. The largest stablecoins by market capitalization, USDT (Tether) and USDC, are both tied to the dollar.
Waller’s stance aligns with previous comments from Federal Reserve Chair Jerome Powell, who, in February last year, expressed strong support for establishing a stablecoin regulatory framework. Powell reaffirmed the Fed’s commitment to developing both stablecoins and Central Bank Digital Currencies (CBDCs) in the U.S.
Meanwhile, legislative efforts around stablecoin regulation continue to evolve. Rep. Maxine Waters, a leading Democrat on the House Financial Services Committee, has proposed a regulatory framework involving oversight by the Federal Reserve, the FDIC, and the Office of the Comptroller of the Currency (OCC). In contrast, Republican Rep. French Hill introduced a draft bill co-sponsored by Rep. Bryan Steil, which assigns stablecoin oversight primarily to the OCC rather than the Federal Reserve.
These bipartisan efforts signal ongoing discussions on how to effectively regulate stablecoins in the U.S. financial system.