Economy
Federal Reserve calls for swift regulation of stablecoins amid market boom
Federal Reserve Vice Chair for Supervision, Michael Barr, during D.C. Fintech Week, emphasized the need for prompt regulation of stablecoins like and USDC. His remarks followed the unregulated surge of these digital currencies in the bear market and the significant profits garnered by Circle and Coinbase (NASDAQ:) from USDC. Barr’s concerns are rooted in the potential financial instability risks posed by these dollar-backed digital currencies.
Despite Tether’s market cap exceeding $85 billion, Congress has shown a slow response toward passing a regulatory framework bill for these currencies. The bill, led by House Financial Services Committee Chair Patrick McHenry (R-N.C.), faced opposition from Maxine Waters (NYSE:) (D-Calif.). Barr urged Congress to expedite this legislation to mitigate potential financial instability risks.
Barr also discussed the ongoing research on central bank digital currencies (CBDCs), which are government-issued alternatives to stablecoins. However, he confirmed that the Federal Reserve has not yet reached a decision regarding CBDCs.
Barr further underscored the potential of stablecoins to function as private money and their possible destabilizing effects on the financial network without proper regulation. He advocated for robust federal regulation that would allow the Federal Reserve to approve, regulate, and enforce ‘rules of the road’ against stablecoin issuers, a responsibility he suggested should fall on Congress.
The Vice Chairman reiterated the Fed’s commitment to taming US inflation, with a specific target of reducing it to 2%. He also confirmed that any initiative regarding a digital dollar would require explicit approval from the White House and Congress.
This comes amidst a legislative debate where Democrats support federal oversight of “private money” entities like stablecoin issuers, in contrast to Republicans who favor state-level regulation. The House Financial Services Committee has advanced a stablecoin bill, backed by some Democrats, but it still awaits a House floor vote and could be tied to a key spending bill. Senate approval is also necessary.
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© Reuters. Russian Central Bank Governor Elvira Nabiullina attends a news conference in Moscow, Russia June 14, 2019. REUTERS/Shamil Zhumatov/File Photo
MOSCOW (Reuters) – Russia’s central bank will need two to three months to make sure that inflation is steadily declining before taking any decision on interest rate cuts, the bank’s governor Elvira Nabiullina told RBC media on Sunday.
The central bank raised its key interest rate by 100 basis points to 16% earlier in December, hiking for the fifth consecutive meeting in response to stubborn inflation, and suggested that its tightening cycle was nearly over.
Nabiullina said it was not yet clear when exactly the regulator would start cutting rates, however.
“We really need to make sure that inflation is steadily decreasing, that these are not one-off factors that can affect the rate of price growth in a particular month,” she said.
Nabiullina said the bank was taking into account a wide range of indicators but primarily those that “characterize the stability of inflation”.
“This will take two or three months or more – it depends on how much the wide range of indicators that characterize sustainable inflation declines,” she said.
The bank will next convene to set its benchmark rate on Feb. 16.
The governor also said the bank should have started monetary policy tightening earlier than in July, when it embarked on the rate-hiking cycle.
© Reuters. FILE PHOTO: Workers walk past an under-construction area with completed office towers in the background, in Shenzhen’s Qianhai new district, Guangdong province, China August 25, 2023. REUTERS/David Kirton/File Photo
SHANGHAI (Reuters) – China’s top planning body said on Saturday it had identified a second batch of public investment projects, including flood control and disaster relief programmes, under a bond issuance and investment plan announced in October to boost the economy.
With the latest tranche, China has now earmarked more than 800 billion yuan of its 1 trillion yuan ($140 billion) in additional government bond issuance in the fourth quarter, as it focuses on fiscal steps to shore up the flagging economy.
The National Development and Reform Commission (NDRC) said in a statement on Saturday it had identified 9,600 projects with planned investment of more than 560 billion yuan.
China’s economy, the world’s second largest, is struggling to regain its footing post-COVID-19 as policymakers grapple with tepid consumer demand, weak exports, falling foreign investment and a deepening real estate crisis.
The 1 trillion yuan in additional bond issuance will widen China’s 2023 budget deficit ratio to around 3.8 percent from 3 percent, the state-run Xinhua news agency has said.
“Construction of the projects will improve China’s flood control system, emergency response mechanism and disaster relief capabilities, and better protect people’s lives and property, so it is very significant,” the NDRC said.
The agency said it will coordinate with other government bodies to make sure that funds are allocated speedily for investment and that high standards of quality are maintained in project construction.
($1 = 7.1315 renminbi)
© Reuters. Russian Central Bank Governor Elvira Nabiullina attends a news conference in Moscow, Russia June 14, 2019. REUTERS/Shamil Zhumatov/File Photo
MOSCOW (Reuters) – Russia’s central bank will need two to three months to make sure that inflation is steadily declining before taking any decision on interest rate cuts, the bank’s governor Elvira Nabiullina told RBC media on Sunday.
The central bank raised its key interest rate by 100 basis points to 16% earlier in December, hiking for the fifth consecutive meeting in response to stubborn inflation, and suggested that its tightening cycle was nearly over.
Nabiullina said it was not yet clear when exactly the regulator would start cutting rates, however.
“We really need to make sure that inflation is steadily decreasing, that these are not one-off factors that can affect the rate of price growth in a particular month,” she said.
Nabiullina said the bank was taking into account a wide range of indicators but primarily those that “characterize the stability of inflation”.
“This will take two or three months or more – it depends on how much the wide range of indicators that characterize sustainable inflation declines,” she said.
The bank will next convene to set its benchmark rate on Feb. 16.
The governor also said the bank should have started monetary policy tightening earlier than in July, when it embarked on the rate-hiking cycle.
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