Fed's Waller says stablecoins do not need to be subject to full banking rulebook

FILE PHOTO: Federal Reserve Board building on Constitution Avenue is pictured in Washington, U.S., March 19, 2019. REUTERS/Leah Millis

(Reuters) – A stronger regulatory and supervisory framework is needed to ensure that stablecoins are a safe form of payment, but they should not necessarily be subject to all of the same rules as banks, Federal Reserve Board Governor Christopher Waller said on Wednesday.

Waller also said that while he would be okay with the idea of banks being able to issue both bank deposits and stablecoins, he disagrees with the idea that only banks should be able to issue stablecoins.

“The regulatory and supervisory framework for payment stablecoins should address the specific risks that these arrangements pose — directly, fully, and narrowly,” Waller said in remarks prepared for a virtual conference organized by the Cleveland Fed. “But it does not necessarily mean imposing the full banking rulebook, which is geared in part toward lending activities, not payments.”

The Fed official added that he is still skeptical of the need for a central bank digital currency, or CBDC, because there is already “real and rapid innovation” happening in the payments space.

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