Fed Chair Powell Reaffirms Support for Stablecoin Regulation
As digital assets continue to move into the mainstream, Federal Reserve Chair Jerome Powell has once again voiced his support for creating a legal framework for stablecoins.
Speaking at the Economic Club of Chicago on April 16, Powell described stablecoins as a digital product with the potential for “fairly wide appeal,” especially if paired with strong consumer protections.
Reflecting on the crypto industry’s past volatility, Powell acknowledged the wave of failures and frauds in 2022 and 2023 that shook investor confidence. During that time, the Federal Reserve worked with lawmakers to introduce legislation around stablecoins, but the effort didn’t gain traction.
“We were not successful,” Powell said. “But I think the climate is changing. The sector is becoming more mainstream, and Congress is once again considering a legal framework for stablecoins. Depending on what’s in it, that’s a good idea—we need that. There isn’t one now.”
This isn’t Powell’s first time addressing the need for regulation. Back in June 2023, he told the House Financial Services Committee that stablecoins are “a form of money” and require strong federal oversight.
Momentum Builds for Stablecoin Legislation
Support for stablecoin legislation appears to be gaining ground in Washington. The election of President Donald Trump has brought a wave of pro-crypto appointments and policy shifts. One key move was the creation of the President’s Council of Advisers on Digital Assets, led by Bo Hines.
At a digital asset summit in New York last month, Hines said that stablecoin legislation is a top priority for the administration. With the Senate Banking Committee already approving the GENIUS Act, a comprehensive stablecoin bill could reach the president’s desk within the next two months.
Stablecoins pegged to the US dollar remain the most widely used tokens in crypto trading and remittances. The total market value of stablecoins is currently around $227 billion, according to RWA.xyz.
Featured image from: cointelegraph.com