Fed's Barr Calls for Strengthened Stablecoin Regulation to Prevent Systemic Risks

Jinse Finance reported that Federal Reserve Governor Barr stated that more specific regulatory measures are needed to ensure the safe operation of stablecoins. On Thursday, Barr said: "To fully realize the potential of stablecoins, further safeguards must be established to protect households, businesses, and the entire financial system." Barr, who previously served as Vice Chair for Supervision at the Federal Reserve, welcomed the passage of the Genius Act earlier this year. The act establishes a regulatory framework for stablecoins, including the types of assets required to support their issuance. However, he also pointed out that regulators still need to address legal loopholes to strengthen market confidence in stablecoins and prevent companies and consumers from being impacted by "runs" or other instability events. The Genius Act stipulates that stablecoins must be backed by highly liquid assets, such as U.S. Treasury bonds.