{"id":22112,"date":"2023-09-08T19:58:29","date_gmt":"2023-09-08T19:58:29","guid":{"rendered":"https:\/\/nftandcrypto-news.com\/crypto\/fed-vice-chair-barr-gives-update-on-cbdc-research-plugs-stablecoin-legislation\/"},"modified":"2023-09-08T19:58:31","modified_gmt":"2023-09-08T19:58:31","slug":"fed-vice-chair-barr-gives-update-on-cbdc-research-plugs-stablecoin-legislation","status":"publish","type":"post","link":"https:\/\/nftandcrypto-news.com\/crypto\/fed-vice-chair-barr-gives-update-on-cbdc-research-plugs-stablecoin-legislation\/","title":{"rendered":"Fed Vice Chair Barr gives update on CBDC research, plugs stablecoin legislation"},"content":{"rendered":"

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The Federal Reserve Bank vice chairman spoke at the Philadelphia Fed\u2019s fintech event on Sept. 8 about what the central bank\u2019s role is in financial innovation. Research and supervision was the short answer, with a nod to the FedNow Service.<\/p>\n

Along with the standard disclaimer about it making no decisions without congressional authorization, Barr provided an overview of the Fed\u2019s \u201ccurrent focus\u201d of central bank digital currency (CBDC) research. He characterized it as \u201cbasic research [\u2026] that might support a CBDC payments backbone, or for other purposes in the existing payments system.\u201d <\/p>\n

Specifically, Barr mentioned system architecture for recording transactions and ownership in ledgers and tokenization models. A FEDS Notes publication the same day on wholesale CBDCs also emphasized that \u201cthe technology associated with tokenized platforms is not incompatible with existing central bank money functioning as a settlement asset.\u201d<\/p>\n

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This payments speech from Michael Barr, vice chair for supervision at the Federal Reserve, features a punctuation mark rarely observed in Fedspeak: an exclamation point! https:\/\/t.co\/G8HIXuMvYx pic.twitter.com\/F3GJezrs3N<\/a><\/p>\n

\u2014 Brendan Pedersen (@BrendanPedersen) September 8, 2023<\/a><\/p><\/blockquote>\n

Barr reminded his audience of the Fed\u2019s novel activities supervision program, which it introduced last month. That dedicated team of supervisors can provide feedback that would allow a federally supervised bank to obtain \u201cwritten supervisory non-objection\u201d to its novel activities involving stablecoins, among other things. Barr said this activity aligns with Office of the Comptroller of the Currency (OCC) policies outlined in interpretative letters 1174 and 1179.<\/p>\n

Related: US lawmakers invoke FTX and spar on direction of crypto bills<\/em><\/strong><\/p>\n

Strong federal oversight of stablecoins, which is foreseen in the OCC letters, is in the interest of the Fed, Barr said, as a dollar-pegged stablecoin \u201cborrows the trust of the central bank.\u201d He expressed his appreciation\u00a0for current legislative efforts:<\/p>\n

\u201cIf non-federally regulated stablecoins were to become a widespread means of payment and store of value, they could pose significant risks to financial stability, monetary policy, and the U.S. payments system.\u201d<\/p><\/blockquote>\n

The Fed equipped large banks, regional banks, community banks and credit unions with the rails for broadly accessible 24-hour instant payments through the FedNow Service, introduced in July, Barr said. He added that current volumes of the service are small, but it is up to the depository institutions to make the service available.<\/p>\n

Magazine: Unstablecoins: Depegging, bank runs and other risks loom<\/em><\/strong><\/p>\n