Washington is showing intentions to establish clear rules for the crypto market, potentially altering the industry landscape in the coming years.
Jerome Powell's Position on Stablecoins
During his testimony before Congress on June 18, 2023, Federal Reserve Chairman Jerome Powell described legislative progress in crypto as "a great thing," emphasizing the need for a specific framework for stablecoins. This statement contrasts with the Fed's cautious approach in recent years.
The Significance of the GENIUS Act for the Industry
The recently passed Senate GENIUS Act aims to regulate stablecoins at the federal level, proposing a framework with centralized oversight. Key provisions include reserve and transparency requirements that are expected to enhance the stability of stablecoin issuers.
A New Atmosphere for Banks and Cryptocurrencies
Jerome Powell also announced that the Fed would no longer take "reputational risk" into account when assessing banking activities. This decision could promote collaboration between banks and crypto players, promising a more favorable environment for the crypto industry in the U.S.
Changes in stablecoin regulation and the approach towards crypto activity by banks could open new avenues for growth and innovation in the U.S. financial sector.
