(Reuters) – Federal Reserve Chairman Jerome Powell said on Tuesday that digital financial assets need proper regulation to ensure a level playing field and protect consumers.
“In the decentralized finance ecosystem, there are these very important structural issues around the lack of transparency,” Powell said during a panel discussion on digital finance organized by the Banque de France.
“We need to be very careful about how crypto activities are carried out within the purview of regulation… There really needs to be more proper regulation so that as Decentralized Finance expands and starts to touch more and more Multiple retail clients, proper regulation is in place… They all need ‘same risk, same regulation’ wherever it happens.”
He added that while stablecoins, a cryptoasset that attempts to pegg their value to traditional currencies like the U.S. dollar, are very different from unbacked cryptoassets, they also require careful monitoring.
“If you’re going to create private money on a national scale, you do need a role for the federal government… We think the Fed really should play that role. That’s our main focus right now. ,” Powell said.