The Federal Reserve’s vice chair for supervision, Michael Barr, may have meant for balance to be a key theme in his speech Wednesday at DC Fintech Week.
“Striking the right balance between creating an enabling environment that supports innovation and managing related risks to businesses, households and the stability of the financial system is no easy task,” he said. “Everyone has a stake in getting the regulatory balance right.”
But the undercurrent in his appearance may well have been interconnectedness — not just in reference to the effect technologies such as digital assets could have on the financial system, but for the number of times Barr made clear the Fed doesn’t regulate in a bubble.
He took care to note that the central bank is working in tandem with the Office of the Comptroller of the Currency (OCC) and Federal Deposit Insurance Corp. (FDIC) to develop crypto regulation.
He made two call-outs to Congress: one, urging lawmakers to create a strong framework for the oversight of stablecoins, and another to reiterate that the Fed would be loath to create a central bank digital currency (CBDC) without lawmakers’ backing.
