The Fed's latest moves to increase oversight of banks' ties to cryptocurrencies undermine progress on legislation to regulate stablecoins. This conclusion is contained in a letter addressed to the head of the Central Bank, Jerome Powell, from a group of congressmen.
The document was signed by the head of the House Financial Services Committee, Patrick McHenry, as well as his fellow Republicans Bill Huizenga and French Hill.
“We are concerned that the Fed is taking these actions to obstruct Congress from establishing a stable payments regulatory regime. If these regulations continue, […] they will deter banks from participating in the digital asset ecosystem,” the lawmakers said.
In early August, the Federal Reserve required financial institutions to obtain written approval from the agency before issuing, holding or transacting dollar tokens.
Additionally, the Fed will regulate the provision of banking infrastructure to companies involved in digital assets and blockchain technology. Oversight teams will have discretion to review institutions for compliance with U.S. law.
Thus, the Central Bank intends to ensure the safety and reliability of the banking system.
“While the oversight process masquerades as guidance [...], it is clear that the Fed does not intend to permit such activity, at least as it relates to public blockchains,” the congressmen said.
The authors of the document expressed regret that the Fed’s latest actions complicate the creation of a regulatory framework for stablecoin issuers.
“Instead of working with Congress to establish a workable [stablecoin] regime, less than two weeks after the Committee’s decision, the Central Bank issued these regulations,” they pointed out.
Lawmakers ordered the Federal Reserve to respond to the letter by September 29.
In February, the Federal Reserve, the FDIC and the OCC reminded US lending institutions of the potential risks posed by companies focused on providing crypto services.
Let us recall that in June, the head of the Central Bank, Jerome Powell, called stablecoins money and called for their regulation. Earlier, the Financial Services Committee of the US House of Representatives presented the third version of the profile bill on “stable coins”.
