Fed Chair Powell: Calls for the establishment of a stablecoin regulatory framework to support reasonable interaction between the banking industry and the digital asset industry.

Fed Chairman Jerome Powell recently reiterated the necessity of establishing a regulatory framework for stablecoins, while stating that the Fed does not intend to restrict legitimate interactions between the banking industry and the digital asset sector.

In a speech at the Chicago Economic Club, Powell pointed out that it is crucial to establish a regulatory framework given the increasing importance of digital tools such as stablecoins. He noted that both houses of Congress are currently making renewed efforts to advance stablecoin-related legislation. Although previous collaborations with Congress have not been successful, Powell stated that the current situation is changing, and lawmakers have shown renewed interest in formally establishing regulatory provisions.

Powell emphasized that such a regulatory framework should include consumer protection measures and ensure transparency. He added: "Stablecoins, as a digital product, may actually have quite broad appeal."

When discussing the Fed's stance on banking activities related to digital assets, Powell acknowledged that U.S. banking regulators, including the Fed, had previously taken a more conservative approach when issuing guidance. However, he stated that as long as consumer rights and financial safety can be ensured, some guidance may be moderately relaxed to accommodate responsible innovation.

Powell said: "We will try to make adjustments in a way that maintains the safety and soundness of the financial system." This further clarifies the Fed's position that it does not intend to prevent banks from serving legitimate digital asset clients.

Earlier this year, Powell clearly stated during his testimony in Congress that digital asset activities have been conducted within banks regulated by the Fed under the established regulatory framework. He cited digital asset custody as an example, explaining that if banks and regulators understand the scope of these activities, they can safely provide such services.

Powell also acknowledged that integrating digital assets into traditional financial regulation is quite complex, calling for a more comprehensive regulatory framework. After the Federal Open Market Committee (FOMC) meeting in February this year, he stated that although the threshold for banks to engage in digital asset businesses remains high, the Fed does not intend to cut off banking services for legally operating digital asset companies.

It is worth noting that the use of stablecoins in payments and digital settlements continues to grow. Last year, the transfer amount of stablecoins approached $14 trillion, surpassing Visa's transaction volume. Currently, the U.S. has not established a federal regulatory framework specifically for stablecoins, but Congress has proposed several legislative measures, including the GENIUS Act and the STABLE Act.

The Fed's latest stance indicates that as stablecoins increasingly integrate into the global financial markets, U.S. financial authorities are becoming more willing to engage in the formulation of digital asset policies. Powell's statement also shows that the Fed supports Congress's efforts to establish formal rules for stablecoins, provided that such legislation can strike a balance between innovation and risk control.